Landlord Says His Mortgage Rate Is Jumping From About 4 Percent to Over 8 Percent So His Tenants Will Be Paying the Extra $600 a Month

Plenty of landlords raise the rent quietly with a letter in the mailbox. This one explained himself on camera and braced for the backlash. “I’m a landlord and I’m raising rent a lot,” says @masteroptionstrader. “And it’s not because I really want to, it’s because I have to.” His reason: the mortgage on his rental house is about to reset, and the new rate is roughly double the old one.

He lays out the numbers. He bought the rental for about $300,000 in 2020, when rates were low. His loan carried a rate of 4.2 percent, fixed for seven years, then variable. That fixed period ends this year. “My new rate, 8.4 percent,” he says. “My mortgage payment on the same house is going up $600 a month.”

His caption gives slightly different figures, describing the change as going from 4.5 percent to 8 percent and adding $648 a month. Either way, the story is the same. The payment is jumping by roughly $600 a month, and he says it is going to the tenant.

He says plainly that he has no choice and that the extra cost has to be passed to the renter.

Why He Says He Cannot Absorb It

He explains that this is not the only cost that has gone up. Property taxes and insurance have both increased, he says, and so far he has covered those himself. But he draws the line at the mortgage jump. “I’ve been able to eat most of that, but I can’t just eat $600 extra dollars a month,” he says.

His point is that, without a rent increase, he would be paying out of his own pocket every month to house someone else in his $300,000 rental. He knows how that will land with some people. “I get it. I’m the landlord. I’m the villain,” he says.

His caption is even more blunt: “The bank raised mine, I raised yours. Fight me.” He closes the video by asking both sides to weigh in, inviting landlords to share how much they are raising rent this year and renters to share how much theirs is going up.

@masteroptionstrader

How a Loan Like His Works

What he describes is an adjustable-rate mortgage, often called an ARM. A seven-year ARM keeps the same interest rate for the first seven years. After that, the rate adjusts on a set schedule based on a market index plus a fixed margin spelled out in the loan documents. When rates were near record lows in 2020 and 2021, many buyers and investors chose these loans for their lower starting payments, betting they would sell or refinance before the reset.

Most adjustable loans have caps that limit how much the rate can rise at the first adjustment, at each later adjustment, and over the life of the loan. Investment property loans, especially commercial loans, can follow different terms, so borrowers need to read their own paperwork closely.

If you or a family member has an ARM, the reset date matters. Look up when your fixed period ends, find the caps in your note, and talk to your lender or a few others about refinancing options well before the adjustment arrives. Waiting until the new payment shows up limits your choices.

What Renters Can Do When the Rent Jumps

Whatever you think of his reasoning, renters across the country are facing increases tied to higher costs for owners. Here is how to handle one.

Check the notice rules. Most states require written notice before a rent increase, commonly 30 days for month-to-month tenants, and some require longer notice for larger increases. During a fixed-term lease, rent generally cannot go up unless the lease allows it.

Find out whether rent control applies. A handful of states and cities limit how much rent can rise each year, though many single-family homes are exempt. Your local housing office or a tenant rights group can tell you what rules cover your home.

Ask for the reasoning and negotiate. A landlord who explains rising costs may still be open to a compromise. A smaller increase, a phased increase over several months, or a longer lease at a set rate can benefit both sides. Long-term tenants who pay on time are valuable, and finding a new renter costs money.

Compare similar rentals nearby. If comparable homes rent for less, that information gives you leverage, or a clear reason to move.

Run the numbers on moving. Deposits, movers, time off work and utility setup add up quickly. Sometimes paying more is still cheaper than relocating. Sometimes it is not.

Budget for the new amount early. If an increase is coming, start setting the difference aside now. Review subscriptions, insurance and utility plans for savings, and check whether you qualify for local rental assistance or property tax relief programs for renters, which some states offer to older adults and lower-income households.

Get everything in writing. Whatever you agree to, make sure the new amount and start date appear in a signed lease or written notice.

His video makes plain the chain of costs that often sits behind a rent increase: a bank raises a rate, a landlord’s payment climbs, and the tenant feels it next. He made no apology for passing it along. He just asked everyone on both sides of the lease to share their own numbers.

Willow and Hearth