“How Property Taxes Affect Your Monthly Payment”

When you buy a home, it’s easy to focus on the mortgage itself—the loan amount, interest rate, and term length. But one cost that often surprises new homeowners is property tax, and how it directly affects your monthly payment.

Understanding Property Taxes

Every homeowner pays property taxes, which are calculated based on the assessed value of the property and the local tax rate. These rates vary depending on your city or county and help fund essential services like schools, fire departments, and road maintenance. Your lender typically collects these taxes through your escrow account, spreading them across your monthly mortgage payments.

How It Impacts Your Monthly Bill

Let’s say your annual property tax is $3,600. Instead of paying it all at once, your lender divides it into 12 parts—adding $300 per month to your mortgage payment. That means even if your principal and interest stay the same, your overall payment can increase if local tax rates go up or your property’s assessed value rises.

Tips to Stay Prepared

• Review your escrow statement annually to see if your taxes have changed.

• Appeal your assessment if you believe your home was overvalued.

• Budget for potential increases—property taxes tend to rise over time as property values grow.

Bottom Line

Property taxes are an unavoidable part of homeownership, but understanding how they work helps you plan better. When budgeting for your dream home, remember: your monthly payment isn’t just about the mortgage—it’s also about the community you’re investing in.