How do mortgage payments go up if it’s a loan?
In: Economics
There are lots of different kinds of mortgages. A typical, 30 year fixed mortgage usually includes payments for taxes and insurance in the payment. Although the payments for principal and interest don’t change in that kind of loan, taxes and insurance usually go up, especially as property values rise. The taxes on my loan have doubled in the past few years, so my payment has gone up by a couple hundred dollars to cover that increase. Another kind of mortgage is an adjustable rate mortgage. Under that kind of loan, the interest rate changes depending on what interest rates overall are doing, so your payment of interest might go up or down. You still have taxes and insurance in that kind of loan, which can also go up (or down if property values drop).
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