Tip: Even with a fixed-rate mortgage, your total monthly payment can still change.Īlthough your principal and interest payment will generally remain the same as long as you make regular payments on time (unless, for example, you have a balloon loan), your escrow payment can change. If you live in a condo, co-op, or a neighborhood with a homeowners’ association, you will likely have additional fees that are usually paid separately. Principal + interest + mortgage insurance (if applicable) + escrow (homeowners insurance and tax) = total monthly payment If your loan requires other types of insurance like private mortgage insurance, these premiums may also be included in your total mortgage payment as well.

Your mortgage company typically holds the money in the escrow account until those insurance and tax bills are due, and then pays them on your behalf. If you have an escrow account, you pay a set amount with every mortgage payment for these expenses. The principal is the amount you borrowed and have to pay back, and interest is what the lender charges for lending you the money.įor most borrowers, the total monthly payment you send to your mortgage company includes other things, such as homeowners insurance and taxes that may be held in an escrow account. The principal and interest payment on a mortgage is probably the main component of your monthly mortgage payment.

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