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What's in a monthly mortgage payment?

How a monthly mortgage payment is built, and which parts of it change while the loan runs.

47 sec · Captions available on the player · Presented by AI-generated presenters, with every line taken from the FreeRateUpdate page it answers.

Source: FreeRateUpdate mortgage payment calculator page

Transcript

This is FreeRateUpdate News. I'm Edmund Ledger. Let's look at everything in a monthly mortgage payment. Principal pays down the loan. Interest is the cost of borrowing on what you still owe. Lenders often collect property taxes and homeowners insurance too, and hold them in escrow. On a conventional loan with under 20% down, private mortgage insurance is typically added. Early payments are mostly interest. Later ones are mostly principal. The payment calculator also adds taxes, insurance, mortgage insurance and HOA dues, so you see the whole monthly payment. I'm Edmund Ledger, for FreeRateUpdate News.

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