How the payment is worked out
Principal and interest use the standard amortization formula M = P·r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r the monthly rate and n the number of payments. Property tax, insurance and HOA are then added to give the full monthly cost.
Lowering your payment
A bigger down payment, a lower rate or a longer term all reduce the monthly payment. A shorter term costs more each month but saves a lot of interest overall.
Frequently asked questions
What is included in a mortgage payment?
Usually principal, interest, property tax and homeowners insurance (often called PITI), plus HOA fees or mortgage insurance where they apply.
How much should I put down?
20% avoids private mortgage insurance on most conventional loans, but many loans allow 3–5% down.
Is a 15-year or 30-year mortgage better?
A 15-year loan has higher payments but far less total interest. A 30-year loan keeps payments lower and more flexible.