How do mortgage payments go up if it’s a loan?
In: Economics
Couple of different ways.
Mortgage payments include a certain amount for interest, and also for an escrow account that goes to pay property taxes and often homeowners insurance.
* Some loans have a variable/adjustable interest rate. If interest rates go up, payment amount increases to keep pace.
* If property taxes or insurance premiums go up, payment amount has to increase to maintain the balance in escrow used to pay for those.
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