What’s in a Mortgage Payment? (P&I vs Escrow vs HOA)

Term	Meaning	Example
Principal	The portion of your payment that reduces your outstanding loan balance.	If your loan is $300 000 and you pay $500 principal this month, your new balance is $299 500.
Interest	The lender’s charge for borrowing the money.	Determined by your interest rate and remaining balance.

Tip: Early in the loan, interest dominates the payment; later, principal does. That’s what your Amortization Schedule Calculator

2. Property Taxes (Escrow Part 1)

Local governments collect property taxes—usually paid annually or semi-annually.
Your lender often divides that bill into 12 parts and collects it monthly in escrow, then pays the tax authority for you.

• Why it matters: taxes can change yearly; expect your payment to adjust.

• Florida note: county millage rates vary widely—check your county appraiser’s site.

Related: Florida Mortgage Calculator

3. Homeowner’s Insurance (Escrow Part 2)

Protects your property against fire, theft, and other covered events.

• Paid annually but collected monthly in escrow.

• You can shop insurance providers to lower this cost.

Combine taxes + insurance (+ PMI if any) = escrow portion of your payment.

4. Private Mortgage Insurance (PMI)

If you put < 20 % down, most conventional loans require PMI to protect the lender.

• Typical cost: 0.3 – 1.0 % of loan balance per year.

• Drops automatically near 80 % loan-to-value (LTV).

• FHA loans use MIP instead—see the FHA Mortgage Calculator

Use: PMI Calculator to see when it disappears.

5. HOA or Condo Dues

Monthly fees for community maintenance or amenities.

• Paid separately from your lender (not escrowed).

• Include this when estimating your “all-in” monthly housing cost.

6. Optional Add-ons & Fees

• Mortgage points: upfront cost that lowers your rate. Try the Mortgage Rate Calculator

• Flood or wind insurance: common in coastal Florida.

• Supplemental tax assessments: after new construction or renovations.

Example: Typical Breakdown