Understanding Your Mortgage Payment
Your monthly mortgage payment includes principal, interest, property taxes, and insurance (PITI). Principal and interest are calculated using amortization. Taxes and insurance are often held in escrow and paid by your lender on your behalf.
How Down Payment Affects Your Mortgage
A larger down payment reduces your loan amount, lowering monthly payments and total interest. Putting 20% down also eliminates private mortgage insurance (PMI), saving $100-300/month. On a $350,000 home, 20% down saves over $100,000 in interest over 30 years vs 5% down.
15-Year vs 30-Year Mortgage
A 15-year mortgage has higher monthly payments but saves enormous amounts in interest. On a $280,000 loan at 6.5%: 30-year costs $357,362 in interest; 15-year costs $157,289 — a savings of $200,073.