An internet user has sparked discussion after claiming that she’s considering staying in her rented property after observing a spike in mortgage payments.
In a video with over 229,000 views as of Sunday, TikTok user Lexxy (@theycallme_lexxy) writes, “Me seeing everyone post that their mortgage payment went up and me not knowing that was even possible.” In the caption, she adds, “Guess I’ll be staying in my renter’s business.”
This video had many in the comments questioning: Is it possible for one’s mortgage payments to suddenly go up?
There are two possible issues to which Lexxy may be referring.
First, interest rates for mortgages are higher than they’ve been in previous years. As noted by Forbes, “Over the past two years, mortgage rates have skyrocketed to their highest levels in decades amid the Fed’s efforts to tame inflation through aggressive interest rate policy actions.”
“The average mortgage rate for a 30-year fixed is 7.12%, nearly double its 3.22% level in early 2022,” writes authors Robin Rothstein and Caroline Basile. “The average cost of a 15-year, fixed-rate mortgage has also surged to 6.55%, compared to 2.43% in January 2022.”
Lexxy may be referring to the idea that mortgage rates are going up for new borrowers, rather than those with loans suddenly seeing their monthly payments go up.
However, she could also be referencing the idea that one paying a monthly mortgage has recently experienced a hike in monthly payments. As many commenters noted, this may be possible but is omitting the whole story.
“They are saying the mortgage but it’s the homeowners insurance and property tax,” a user wrote.
“Yup. property tax and home insurance can do it,” detailed another. “Mine went up about $100 month but ppl who said almost 1k a month. Nah I dont want it.”
As these viewers referenced, the main way that one may see their monthly mortgage payments go up is if their property value has increased.
@theycallme_lexxy Guess ill be staying in my renter’s business 😂😂😭 #fypシ #foryoupage #salisburysteak #banquet #mortgage #inflation2024 #inflation ♬ SeKret Valentines Day – Se’Kret
“The part of your fixed-rate mortgage payment that changes annually is your escrow,” explains Rachel Kurzius for the Washington Post. “Each year, the financial institution that holds your mortgage estimates how much you’ll pay in property taxes and home insurance. If your home value has risen since the prior year, the cost of your taxes and insurance will also increase. Thus, the entity that holds your mortgage will hike up your escrow to ensure your monthly payment can cover those higher bills.”
In the comments section, many users expressed frustration at the current housing market.
“I thought buying a house was a way to lock in payments and avoid rent hikes,” a user wrote.
“Sameeee cause how the hell? Didn’t we sign a contract? How yall just switching the numbers?” questioned a second.
“Yes makes me not want a house unless i own ts outright,” stated a third. “cause WYMMM MORTGAGE CAN INCREASE.”
The Daily Dot reached out to Lexxy via Instagram direct message.
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*First Published: Apr 7, 2024, 10:00 am CDT
Braden Bjella
Braden Bjella is a culture writer. His work can be found in Mixmag, Electronic Beats, Schon! magazine, and more.
