Intro :
Factors that affect your
mortgage payment

Your monthly mortgage payment is more than just a single number; it is a combination of your principal and interest, which are shaped by the size of your loan and the interest rate you secure.These two pillars are influenced by several key financial factors such as:

​​​​​

1. The Interest Rate

Your rate isn't just luck—it’s calculated based on your financial "footprint."

• Credit Score: A higher score typically unlocks lower rates.

• Discount Points: Upfront fees you pay to "buy down" the interest rate.

• Down Payment Size: If you put down less than 20%, lenders view the loan as higher risk, which can impact your rate.​

​​

2. The Total Loan Amount

This is the actual "sticker price" of your debt, determined by:

• Home Purchase Price: The base cost of the property.

• Down Payment: The more cash you provide upfront, the less you need to borrow, reducing your monthly principal.

​

3. Private Mortgage Insurance (PMI)

If your down payment is less than 20%, lenders require PMI. This is an additional monthly cost designed to protect the lender in case of default. Once you build enough equity in the home, this charge is typically removed.