Decode your mortgage payment: principal, interest, taxes and insurance: test your skills
Principal, interest, taxes and insurance — the four parts of a typical monthly housing payment, and how they change over time. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Name the four parts of PITI
- Explain how amortisation shifts interest to principal
- Know why a fixed-rate payment can still change
- Practice
1. What does PITI stand for?
- Practice
2. Early mortgage payments are mostly…
- Practice
3. Why can a fixed-rate payment rise?
- Key idea
4. Which statement best explains "Fixed rate is not fixed payment"?
- Key idea
5. Which statement best explains "Early payments are mostly interest"?
- Key idea
6. Which statement best explains "Budget the whole payment"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
A $200,000 balance at 6% APR. What is the first month’s interest?
Show the answer
$1,000
$200,000 × 0.06 ÷ 12 = $1,000.
Find your (or an example) loan estimate and write the four PITI amounts.
More tests in this bootcamp
- Judge debt by its purpose, rate and total cost
- Choose a debt payoff plan: avalanche or snowball
- Compare debt consolidation without missing the fees
- Use credit cards without carrying interest
- Understand what moves your credit score
- Check your credit report and question errors
- Protect your identity and know the recovery steps
- Respond to debt collectors with records and confidence
- Understand your student loan repayment options
- Compare car loans beyond the monthly payment
- Decode your mortgage payment: principal, interest, taxes and insurance
- Final exam: Debt and credit