Now the problem I am running into is how to scale the incrementing x and y of the missile towards the target so it seems realistic.
How realistic does this need to be?
I'm no missile expert but I'd guess that once fired simple missiles can be approximated by a fixed direction and speed. Then they will just keep going in that direction until they hit something, run out of fuel, or gravity brings them down. When the missile is fired you can store its direction and speed, and move the missile the appropriate constant distance at each step (you can use the trigonometric formulae to convert to x and y co-ordinates).
double delta_distance = speed * delta_time;
double delta_x = Math.cos(angle) * delta_distance;
double delta_y = Math.sin(angle) * delta_distance;
As pointed out in the comments, you could choose to use a velocity vector instead of separately storing the angle and speed.
Minor note: The constant speed is only an approximation for several reasons. When the missile is first fired it will have to accelerate until the propulsion force equals the drag from air resistance. Also as the fuel burns up they may actually be able to travel faster due to having the same force but less mass. But this level of detail is not necessary for a tower defence game. A constant speed is a reasonable simplification.
I don't think this algorithm will work well for you if your targets might be moving quickly and changing direction, because the missiles could often miss their targets.
More advanced heat-seeking missiles would be able to lock on to a target and follow it. They need to be able to change direction when their target moves, but I guess they probably don't adjust their speed. They would also be limited on how fast they can change direction due to physical constraints, so you might want to model that too. Otherwise you could have missiles flying past a target then suddenly flipping around and immediately flying in the opposite direction without first slowing down or turning - and that's not very realistic.
Sophisticated missiles might try to predict where their target is moving to based on their current velocity. They would calculate a path such that the current trajectory of the target collides with the calculated trajectory of the missile. This calculation would have to be updated if the target's movement changes. Obviously this is a little more difficult to implement, but remember that your players want to have fun blasting monsters. They won't be having much fun if all the missiles keep missing their targets. So a little extra work on making sure that your missiles are both realistic and effective will make your game better.