Mortgage guides
Why can housing costs change with a fixed mortgage rate? | Mortgage 101
Sources and calculations checked:
Compare the fixed principal-and-interest payment with housing costs that can change.
The fixed part
Principal + interestFor a fixed-rate, fully amortizing mortgage, the scheduled principal-and-interest payment stays level.
Costs that can change
- Property taxes
- Homeowners insurance
- HOA (if applicable)
- Mortgage insurance (if applicable)
These costs may increase or decrease.
A fixed rate does not mean fixed total monthly housing expenses.
Diagram does not show actual amounts, proportions, or a complete list of costs.
One thing to remember
A fixed mortgage rate does not fix every housing cost.
The illustration assumes a fully amortizing loan with scheduled payments. Taxes, homeowners insurance and applicable HOA costs may change.
Mortgage insurance (if applicable): Costs and payment duration depend on the loan and insurance arrangements; cancellation or termination may be possible when applicable conditions are met. Private mortgage insurance (PMI) and FHA mortgage insurance follow different rules.
CFPB: Explanation and conditions