Quick Answer
A mortgage payment is made up of four parts — PITI: Principal (paying down the loan), Interest (the cost of borrowing), Taxes (property taxes), and Insurance (homeowners insurance). If your down payment is under 20%, PMI is added. Lenders collect the taxes and insurance in an escrow account and pay those bills for you. HOA dues, if any, are billed separately. On a fixed-rate loan P&I stays constant, but taxes and insurance can drift up over time.
Your monthly mortgage payment isn't one thing — it's four (sometimes five). Knowing what each piece is helps you understand your bill, budget accurately, and spot when something changes.
The four parts: PITI
P — Principal — The portion that pays down your actual loan balance. Early on this is small; it grows every month as you pay off the loan.
I — Interest — The cost of borrowing, charged on your remaining balance. Early payments are mostly interest, which is why the first years build little equity.
T — Taxes — Property taxes, often about 1–1.5% of your home's value per year, collected monthly through escrow.
I — Insurance — Homeowners insurance, commonly $1,200–$2,000+ a year, also collected via escrow.
The extras: PMI and HOA
PMI (private mortgage insurance) is added when your down payment is under 20%. It protects the lender, costs roughly 0.3%–1.5% of the loan per year, and can usually be cancelled once you reach 20% equity.
HOA dues, if your home has them, are billed separately by the association — not part of your mortgage or escrow — but they're still a real monthly housing cost.
How escrow works
Each month you pay 1/12 of your annual taxes and insurance into an escrow account, and your lender pays those bills when due. It smooths big annual costs into your monthly payment — but as taxes and premiums rise, your escrow (and total payment) can increase even on a fixed-rate loan.
See your full payment
The mortgage calculator breaks out principal, interest, taxes, insurance, and PMI so you see the full PITI. See typical amounts in how much is a mortgage payment, and watch equity build with the amortization calculator.