How Do Property Taxes Affect My Mortgage Payment?
- By Jim Blackburn
- on
- 100 first time home buyer FAQs
1. Property Taxes Are Often Paid Through an Escrow Account
If your mortgage includes an escrow account, part of your monthly mortgage payment will go toward paying your property taxes.
Your lender will collect these payments from you each month and then pay the property tax bill on your behalf when it’s due
This means you don’t have to worry about paying property taxes directly—they’re handled as part of your mortgage payment.
Understanding your complete monthly payment—including property taxes and insurance—is crucial when budgeting for homeownership. Calculate your Conventional Purchase Loan Payment now to see how property taxes factor into your total monthly housing cost.
2. Property Tax Bills Can Change Each Year Based on Local Assessments
Your property tax bill is based on assessments done by your local government. These assessments can vary annually, depending on:
Changes in property values
Local budget needs (schools, infrastructure, etc.)
Your home’s assessed value and the local tax rateThis means your property taxes—and your **monthly mortgage payment—**can go up or down each year, depending on these adjustments.
If rising property taxes have pushed your monthly payment too high, refinancing to a lower rate could offset the increase. Calculate your Conventional Refinance Rate Reduction Loan Payment now to see if you can lower your base mortgage payment to accommodate higher property taxes.
3. Review Your Annual Escrow Statement for Changes
At the end of the year, your lender will send you an annual escrow statement that breaks down how much of your mortgage went toward property taxes.
Be sure to review this statement for any changes in your property tax rate
If taxes have increased, you might see your monthly mortgage payment go up. If they’ve decreased, your payment could go down.It’s important to budget for these potential changes so you’re not caught off guard.
If unexpected property tax increases have created a financial strain, accessing your home’s equity might provide relief. Calculate your Conventional Cashout Refinance Loan Payment now to see if you can tap equity to cover large tax bills or create an emergency fund for future increases.
For ongoing flexibility with property tax payments, consider a HELOC as a backup option. Calculate your Heloc Loan Payment now to explore how a home equity line of credit could provide a financial cushion for unexpected tax increases.
Ready to Understand Property Taxes and Your Mortgage? Let’s Break It Down Together
At Stairway Mortgage, we help you navigate every part of homeownership—so you’re fully prepared for the financial journey ahead.
📘 Download our homebuyer guides to understand property taxes and escrow.
📊 Check Current Rates to see if refinancing could offset tax increases.
🧮 Explore all our Loan Calculators to plan for tax changes.
🏡 Compare loan costs with our Compare 2 Rates Calculator.
Ready to Take Your First Step?
Skip the guesswork. Take our quick Discovery Quiz to uncover your top financial priorities, so we can guide you toward the wealth-building strategies that fit your life.
- Takes just 5 minutes
- Tailored results based on your answers
- No credit check required
Need a Pre-Approval Letter—Fast?
Buying a home soon? Complete our short form and we’ll connect you with the best loan options for your target property and financial situation—fast.
- Only 2 minutes to complete
- Quick turnaround on pre-approval
- No credit score impact
Got a Few Questions First?
Let’s talk it through. Book a call and one of our friendly advisors will be in touch to guide you personally.
Schedule a CallRelated Posts
