Mortgage

A mortgage payment typically includes Principal (loan amount), Interest, Taxes, and Insurance (PITI). Some also include HOA fees and PMI if down payment is less than 20%.

Shorter terms (15 years) have higher monthly payments but much lower total interest. A 30-year mortgage can cost nearly double in interest compared to a 15-year mortgage.

Amortization is the process of paying off a loan through regular payments. Early payments are mostly interest; later payments are mostly principal. An amortization schedule shows this breakdown.