Understanding Your Mortgage Payment

Your monthly Mortgage Payment consists of paying back the money you borrowed (principle balance) and the interest charged to borrower the money.  This is commonly called your Principle & Interest or P&I for short.  The actual payment is calculated based on how much you owe, the interest rate on your mortgage loan, and the term of the loan (amortization).  Below is an example:

Amount Owed (Principle Balance) – $200,000

Mortgage Interest Rate – 5.5%

Term (Amortization) – 30 Years

Monthly Mortgage Payment (P&I) – $1,135.58
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