What Is Included in a Mortgage Payment?

Your monthly mortgage payment is more than just the cost of the home. In fact, it includes several components that shape your true monthly budget. Understanding these elements helps you buy confidently and avoid surprises.

Your mortgage payment is typically made up of PITI:

1. Principal:
This is the portion of your payment that reduces the actual loan balance over time.

2. Interest:
This is what you pay the lender for borrowing the money. Your interest rate dramatically influences your monthly payment — which is why choosing the right loan product and timing matters.

3. Taxes:
Property taxes vary by city and county. In the High Desert, tax rates generally range around 1.1–1.3% of the assessed value. If your lender collects taxes as part of your payment, they’ll place them into an escrow account and pay them for you twice a year.

4. Insurance:
Homeowners insurance protects your property. Many loans require the policy to be included in your monthly payment.

Depending on your loan type, you may also have:

5. Mortgage Insurance (MI):
This is required on some loans when putting less than 20% down. MI can fall off over time or through refinancing.

6. HOA Fees (if applicable):
For communities like Spring Valley Lake or certain condo developments, monthly HOA dues may apply — although they are billed separately, not within your PITI payment.

I help my clients estimate their TOTAL monthly cost upfront, not just their loan amount. Payment transparency is key — and it ensures that every home we view fits comfortably within your lifestyle and goals.