What is included in your monthly mortgage payment?

A mortgage payment is typically made up of four components: principal, interest, taxes and insurance. The Principal portion is the amount that pays down your outstanding loan amount. Interest is the cost of borrowing money. The amount of interest you pay is determined by your interest rate and your loan balance.

Does mortgage include electricity?

Housing and utilities standards include mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, residential telephone service, cell phone service, cable television, and Internet service.

How much should you pay for mortgage and utilities?

The most common rule of thumb to determine how much you can afford to spend on housing is that it should be no more than 30\% of your gross monthly income, which is your total income before taxes or other deductions are taken out. For renters, that 30\% includes rent and utility costs like heat, water and electricity.

Will my mortgage payment go down after 5 years?

If you have an adjustable-rate mortgage, there’s a possibility the interest rate can adjust both up or down over time, though the chances of it going down are typically a lot lower. After five years, the rate may have fallen to around 2.5\% with the LIBOR index down to just 0.25\%.

What are monthly house expenses?

Total housing expense is the sum of a homeowner’s monthly mortgage principal and interest payments plus any other monthly expenses associated with their home such as insurance, taxes or utilities.

How much should my monthly mortgage be?

The 28\% rule states that you should spend 28\% or less of your monthly gross income on your mortgage payment (e.g. principal, interest, taxes and insurance). Using these figures, your monthly mortgage payment should be no more than $2,800.