Principle, interest, taxes and insurance Click here for the lowest rates on the web. Principle, interest, taxes and insurance 5. Your housing costs will be made up of principle, interest taxes and insurance as far as most lenders are concerned.
Principle payments reduce the amount of money left to pay back.
Interest payments are the amount of money you pay for the use of the lender's money. It the early years of a mortgage pay back, the principle payments are small and the interest payments are large. Property taxes are paid to local taxing authorities, typically to pay the cost of local governments and public schools. Property taxes may vary widely from area to area, so be sure to ask what the property taxes are. However, don't let high taxes scare you off.