Financial Literacy: Mortgage Effects When Interest Rates Rise

Everyone is talking about rising interest rates these days. But why does it matter? Should our students learn about this?

Yes!

Here's a complete ready-to-go lesson for high school students in math class, life skills, home economics, or career and personal planning. It will teach them all about buying a home, getting a mortgage, and how mortgage payments are calculated using interest rates.

1) First, there is a handout explaining all the relevant home-buying vocabulary: from down payment and mortgage to interest and principal. There is a complete handout or a fill-in-the-blanks version: you choose what is best for your students!

2) Then, there is a second sheet with a sample scenario of what happens when interest rates rise and people have to renew their mortgage. This clearly shows, step by step, how mortgage payments can rise by hundreds or thousands of dollars even if you live in the exact same place. This handout also has completed or fill-in-the-blank versions for you to pick from.

3) Next, there is a matching worksheet where students match all the home buying words to their definitions.

4) Finally, there is a math worksheet for students to complete. It has 10 questions for students to calculate themselves about down payments, mortgage payments and rising interest rates. Math skills required are multiplying and dividing with numbers up to 6 digits and working with percents written as a decimal. For example calculating the interest payment on a $300,000 mortgage at 3% would be done: 300,000 x 0.03 All the questions are designed to have round numbers and simply calculations whenever possible.

Grades to Use With:

This lesson is designed for high school students in grades 8-12: from special education to regular home economics classes.

What's Included:

8 Page PDF: Title Page, 2 Pages of Handout, 2 Pages of Sample Scenario, Vocabulary Matching, Math Questions, Complete Answer Key

If you enjoy this product, check out my Financial Literacy Activities like

Household Budget

Debit Cards vs Credit Cards

Bank Statement and Credit Card Bill Practice