---
title: How to Calculate Your Mortgage Payment
description: Calculating your mortgage payment? First, familiarize yourself with the vocabulary. Then estimate your amount. Here are some tips for getting started.
image: https://info.sdhda.org/hubfs/SDHDA_Blog_mortgage_750x375.jpg
---
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Your source for expert information on housing in South Dakota
# How to Calculate Your Mortgage Payment
One potential hurdle you may encounter when navigating the world of [buying your first home](http://blog.sdhda.org/shopping-for-houses-in-south-dakota-3-great-first-steps) is the mortgage payment. What do all the terms mean, and how can you estimate [how much house](http://blog.sdhda.org/how-much-house-can-you-afford) you can truly afford? The first step is familiarizing yourself with the vocabulary—then it's just a matter of estimating the amount so you can plan ahead for your budget.
**Here are a few starter tips for calculating your mortgage payment.**
## Understanding Your Mortgage
First things first—what does all the jargon mean? Your monthly mortgage payment, depending on the [terms of your loan](http://blog.sdhda.org/qualifying-for-a-home-loan-tips-and-tricks-to-do-it-right), will likely be made up of **principal **payment and **interest **payment. The principal is the true balance of the loan—a portion of the amount you borrowed to buy your house. The interest is the amount accrued over time against what you borrowed. Depending on your rate, this interest amount may or may not change over time (put simply, fixed-rate stays the same, and adjustable-rate changes over time).
## Understanding Escrow
Homebuyers generally will be required to utilize an **escrow account **to make their payments. This means that an account is set up that the institution servicing your mortgage uses to manage payment of your property taxes and [home insurances](http://blog.sdhda.org/home-insurance-what-it-covers-and-how-it-works). Your monthly payments are deposited into your escrow account to cover estimated amounts of both of these additional required payments. This can sometimes be a more convenient way to manage your budget, by consolidating your monthly house bill into one payment.
## Calculating Your Payment
Now to the actual payment amount—whether you're making use of an escrow account or not, you'll still need to account for your tax and insurance payments in your budget. Here are the pieces of information that you should know in order to get the most accurate estimate of what your monthly payment could be:
- The number of years attached to your loan's repayment schedule
- The interest rate
- The amount of the loan
- The annual amount of property tax charged by your community
- The estimated cost quoted to you by your homeowner's insurance company of choice
**Ready to determine your mortgage payment?**
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