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Berkshire Hathaway HomeServices Hodrick Realty

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Ways Your Monthly Payments Can Change

This is one of the best times to get a fixed-rate mortgage. Since interest rates have hovered near record lows for years,...

  • Becky Shaible
  • December 14th, 2021
  • 2 min read
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This is one of the best times to get a fixed-rate mortgage. Since interest rates have hovered near record lows for years, they’re bound to go up rather than further down.

You could get lower mortgage payments temporarily with an adjustable rate mortgage or hybrid loan that employs a fixed rate for five years or so and adjusts to market rates when the fixed term expires. Your payment could reset to a much a higher and less affordable interest rate in the future.

A far safer option is the fixed rate mortgage with a rate that never changes over the life of the loan. Even so, your monthly payment can change in other ways.

If you put less than 20 percent of your home’s purchase price as a down payment, lenders will require that you pay for private mortgage insurance (PMI). Expect your payments to rise by 0.3 percent to 1.2 percent of the loan amount. In some cases, PMI can be removed.

Your monthly payments should include escrows for hazard insurance. The amounts can change, so monitor your annual insurance statements from your insurer when it’s time to renew. Your lender will divide the annual amount into monthly payments for your lender to add to your escrow.

Your property tax authority will send you a new statement annually, usually in the spring or early summer. Your tax basis will be based on the purchase price you paid. Most communities place annual limits on increases to avoid homeowner sticker shock. 

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About the author

Becky Shaible

570-321-7000
Becky's passion is marketing and her wide range of experience from retail management to accounts management helps her everyday.

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Berkshire Hathaway HomeServices Hodrick Realty

Berkshire Hathaway HomeServices Hodrick Realty

448 River Avenue, Williamsport PA 17701

Berkshire Hathaway HomeServices Hodrick Realty

448 River Avenue, Williamsport PA 17701

570-321-7000
[email protected]
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