Why Did My Mortgage Payment Go Up?

Depending on the type of loan, a pay adjustment may have been part of the original agreement.

If you are in a fixed-interest loan with a set amortization schedule and reliable monthly payments, and your payment still went up, it could mean that your servicer initiated an escrow adjustment. Your escrow account is a reserve to ensure sufficient funds to pay for property-related charges, particularly taxes, and insurance. It’s possible that there was a miscalculation when first collecting for escrow that the servicer is now trying to correct. More often, however, the amount needed to cover taxes and insurance changed.

Local laws vary, but reassessment tends to occur every one to five years – based on quantitative data reviewed by an official assessor. Taxes can go up when a home or area appreciates in value. When this happens, your servicer must recalculate exactly what is needed to cover the new amount.

Homeowner’s insurance premiums can go up for a few reasons. The amount you pay in premium is based largely on your home’s age, its location, and insurance score. If your home is due for upgrades, you could see a small increase in premium. Also, if the area around your home is appreciating in value, you may see your premium go up.

If you have been making a lot of insurance claims recently, you may be negatively affecting your insurance score. An insurance score is like a credit score, except it is exclusively concerned with risk. If your score is going down, you may simultaneously be watching your premium going up.

Ultimately, homeowner’s insurance has to do with the replacement value and cost of the home. So, unfortunately, the cost of building materials can affect how much you pay for homeowner’s insurance. This is completely out of your control, but if a break suddenly costs more to fix, you could see that reflected in your premium.

If you notice a significant jump in premiums, you should consider shopping around. CapCenter Insurance can help find you the best policy for your home and other assets.

Your mortgage servicer may have started charging new fees, sometimes due to a new payment processing method or service. Your servicer should be able to explain if and why there are new fees and may also be able to instruct you how to get around them – possibly by switching your payment method.

Loan servicers often service thousands of loans at one time. The increased payment could be a simple mistake on the part of your servicer. Mistakes like these are easy to make and, luckily, are just as easy to fix. A quick phone call with your servicer should get you back to your regular payment.

Moving through this list, the common theme is that it’s never a bad idea to contact your mortgage servicer if you’re unsure why your payment changed. You should never just pay the new amount without understanding why you’re paying it. We hope this helps!