How is my monthly mortgage payment calculated?

Monthly mortgage payment is built from four pieces, often shortened to PITI: principal, interest, property tax and homeowners insurance. The principal and interest portion is fixed by your loan amount, rate and term, while tax and insurance can shift year to year and get collected through an escrow account. PMI gets added on top if your down payment falls under the threshold your loan program requires. A lender can show the full breakdown for any specific price and rate combination.