Property Tax Increase

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Property Tax Increase

Logan Meece
Member since 2026 · 1 post · 1 vote

How come they never mention anything about property tax increase even in a fixed mortgage loan. What will that change?  

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  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2mo

    Your monthly payment is PITI.

    The bank can only lock in the for Principal and Interest for you; Taxes and Insurance can't be locked in by your lender - they just help you save up monthly for that, so you have enough in your escrow account at the end of the year to pay for that.

    And meanwhile they have a little extra liquidity they can work with ;-)

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  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2mo
    Quote from @Logan Meece:

    How come they never mention anything about property tax increase even in a fixed mortgage loan. What will that change?  

    Hey Logan, great question! A fixed-rate mortgage only fixes the interest rate on the loan, not your total monthly housing payment. If property taxes increase, your principal and interest payment stays the same, but the tax portion can go up. If your taxes are escrowed with the lender, they’ll typically review the escrow account and increase your monthly payment to cover the higher tax bill, and sometimes there can also be an escrow shortage from the prior year. Same idea with homeowners insurance if the premium increases. This is especially important when analyzing rentals because I wouldn’t assume today’s total mortgage payment will stay exactly the same for the entire loan term. Happy to connect and answer any questions you have!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9122 Reviews
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