The payroll tax cuts that allow workers to take home more of their paychecks do have a price tag of approximately $33 billion dollars. To cover these costs, Congress has added a fee to new mortgages and refinanced mortgages in the coming year, starting on January first, aimed at companies Fannie Mae and Freddie Mac.

This fee will be added to existing government fees on new home-loan lending through the government subsidized companies. The current fee is only 0.3 percentage points of a mortgage and will be rising to 0.4 percentage points when the new program goes into effect.

New mortgage holders will need to calculate in more costs to pay for payroll tax cuts

These changes will hit low-income buyers and first-time buyers the hardest because they are intended to be charged against all new mortgages through the specified mortgage companies, including those that are backed by the Federal Housing Administration, a federal organization that aids buyers who need assistance with subsidized mortgages through private corporations, like Mae and Mac.

Ninety-percent of new home are mortgaged through Fannie Mae and Freddie Mac, and the cost of this new program is controversial because while it saves money from American worker’s paychecks, it simultaneously applies it to an important aspect of the American dream: home ownership.

Current mortgages and those signed before the first of the year will  be exempt from the increase, but current mortgage holders should think twice before refinancing in the next year: these changes do apply to refinancing on eligible mortgages.

This change is only slated to be in effect for two months, but is potentially on the table as a longer-term solution as Congress looks for ways to maintain political and financial stability. The change may be unpopular among homebuyers who will see an increase in their mortgages starting next month. For a $200,000 mortgage, this legislation means an additional $17 per month—and that money doesn’t go toward paying off the home, just paying for income tax breaks.