Definitions for "Payment Shock"
Keywords:  shock, afford, teaser, able, surprise
A term that refers to the difficulty that might arise from a large difference in monthly payments.
Payment shocks are when the discount period ends and the monthly repayments jump by a large amount to match the Standard Variable Rate. You must be sure that you can budget for this in your monthly expenses.
A situation that occurs when an adjustable-rate mortgage (ARM) monthly mortgage payments rise very sharply at an adjustment. The borrower may not be able to afford the payments the loan will require.
Keywords:  jump, taken, variable, low, end
If you have taken out a mortgage on a low rate, the low rate end and the payment jump up the standard variable rate.
Occurs when the terms of a mortgage instrument require an increased payment and the borrower is unable to make or keep up with the increased payment obligation.