Loan basics
Principal and interest (P&I)
Abbreviation: P&I
Definition
Principal and interest (P&I) is the part of a mortgage payment that repays the loan balance (principal) and pays the lender’s charge for borrowing (interest). It excludes property taxes, homeowners insurance, mortgage insurance and HOA dues, which together with P&I make up the full monthly housing payment.
Principal and interest (P&I), explained
For a fixed-rate loan, P&I is calculated with the standard amortization formula from the loan amount, monthly rate and number of payments.
Buyers often compare P&I across lenders, but affordability depends on the full payment, often called PITI.
See P&I in a calculator
The Mortgage Calculator shows how this works with real numbers. Monthly payment, interest breakdown, and amortisation for a fixed-rate mortgage.
Open the Mortgage CalculatorRelated terms
- PITIPITI stands for principal, interest, taxes and insurance — the four components of a typical monthly mortgage payment.
- AmortizationAmortization is the schedule by which a loan is repaid in equal periodic payments, each split between interest and principal.
- Escrow accountAn escrow account is a holding account managed by the mortgage servicer that collects part of each monthly payment to pay property taxes and homeowners insurance when they fall due.
Q.01What is P&I (Principal and interest)?
Q.02Is P&I the same as my monthly mortgage payment?
Q.03Does P&I change on a fixed-rate loan?
Explain it with their numbers
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