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Why did my mortgage payment go up?

If your monthly mortgage payment increases, you’ll want to understand why. You should always contact your mortgage servicer — that’s the company you pay your monthly mortgage payment to — with questions about your specific loan, but here are some possible reasons your required payment might increase.

Reasons for increases to monthly payments

ARM interest rate change

If you have an adjustable-rate mortgage (ARM), your monthly payment can increase when the interest rate increases. Or, if you’ve only been paying interest on your loan, your monthly payment can increase when you begin paying on the principal amount. Depending on the type of loan you have, there may be “built-in” changes like these that affect your monthly payment.

Property tax increase

If you pay property taxes with your monthly payment using an escrow account, your payment may increase if your property taxes go up. You can search online to find out if you’re eligible for any local tax programs that could limit your property tax increases.

Homeowners insurance premium increase

As with property taxes, you may be using an escrow account to pay your homeowners insurance premiums with your monthly payment. If your insurance premiums go up, then your payment will too.

Servicer fees

In some cases, your mortgage servicer may add service fees. Your servicer should notify you of these additions ahead of time, and they will be listed on your monthly statement. 

If you have any questions, contact your mortgage servicer.

Avoid surprises

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It’s never enjoyable to pay a higher monthly mortgage payment. But in most cases, you can at least plan ahead for any changes. Be sure to read all notices sent by your mortgage servicer, including those that come with your monthly statements.

Note: If you think a payment increase is an error, contact your mortgage servicer. If it was a mistake, ask for a corrected statement. Be sure to keep a record of any correspondence.

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