Why Did My Mortgage Go Up Or Change? | Chase (2024)

You may be surprised to know that your mortgage payments can fluctuate, even if you have a fixed interest rate. Although it may be jarring at first glance, this is more common than you may think. Mortgage payments can go up and down throughout the life of your loan for a few reasons, particularly if there are adjustments to factors coupled with your monthly payment. Let’s dive into them below.

Can my monthly mortgage payment go up?

Yes, your monthly mortgage payments can go up. For example, if you have an adjustable-rate mortgage, your mortgage payments can go up with each adjustment period (typically annually). If you have a fixed-rate mortgage, you may still see an increase in your monthly mortgage payments due to several common factors.

Note that some of the following factors are often coupled with your mortgage payments or taken out of an escrow account on a monthly basis.

1. Property taxes and property reassessment

Your property taxes can increase based on your home’s market value. For example, home renovation projects that expand square footage can increase your property's value and then increase your property taxes. The property taxes you pay can also increase due to a change in tax rates at local or state municipalities.

A property reassessment is done by your local municipality to ensure people are paying property taxes that are accurate and fair. In some cases, homeowners may order a reassessment from their municipality themselves, although these are typically performed annually. The assessor reviews properties in the community and takes a holistic look at the market. This could determine that your home has increased in value, which may result in an increase in your property taxes and therefore your mortgage payments.

2. Homeowners insurance

Taking out a mortgage means you’re typically required to have a homeowners insurance policy. Homeowners insurance payments are typically coupled with your monthly mortgage payment — so if the cost of your insurance policy goes up, then it may seem that your monthly mortgage payment has gone up. Your insurance company might raise rates due to inflation, as well as costly or more frequent claims (like severe weather events). In this scenario, it’s not that your mortgage itself has increased but that associated homeownership costs have gone up.

4. Tax exemptions

Property tax exemptions may reduce your tax rate. Your qualifications for certain exemptions may vary depending on the year. Some years you may not qualify, and as a result, you may notice an increase in your monthly mortgage payments.

Can my monthly mortgage payment go down?

Yes — your monthly mortgage payment can go down based on some of the same factors that may cause them to rise. However, the details are a little different:

1. Property taxes

You could potentially see a decrease in property taxes if you have your home value reassessed and for various reasons — like market conditions or property depreciation — your home value has gone down.

2. Removal of homeowners insurance

If your homeowners insurance is removed, you may notice your monthly mortgage payment go down. You may have found a new premium elsewhere and see that your mortgage payments have gone down due to the price reduction.

3. Tax exemptions

As mentioned, your eligibility for tax exemptions can differ each year. You might find you qualify for a new exemption that makes your monthly payments go down; it would be best to consult a tax expert.

4. Mortgage insurance

Mortgage insurance, or private mortgage insurance (PMI), is often required by lenders to protect their investment if a borrower were to default on their loan. PMI is often required when a down payment is less than 20% but varies by mortgage type and lender. When you pay off a certain percentage of your mortgage, your lender may drop the mortgage insurance premium and your payment may go down. Do note that some mortgages never drop the PMI premium.

In summary

It’s common to see monthly mortgage payments fluctuate throughout the life of your loan due to changes in your home value, taxes or insurance. Noticing changes in your mortgage statements and investigating them can help you understand why your monthly payments went up (or down) and how you anticipate any changes in the future.

Why Did My Mortgage Go Up Or Change? | Chase (2024)


Why Did My Mortgage Go Up Or Change? | Chase? ›

In summary. It's common to see monthly mortgage payments fluctuate throughout the life of your loan due to changes in your home value, taxes or insurance.

Why is my mortgage payment suddenly higher? ›

The part of your fixed-rate mortgage payment that changes annually is your escrow. Each year, the financial institution that holds your mortgage estimates how much you'll pay in property taxes and home insurance. If your home value has risen since the prior year, the cost of your taxes and insurance will also increase.

Why did my mortgage rate go up? ›

You could see a rise in your mortgage payment for a few reasons. These include an increase in your property tax, homeowners insurance premium, or both. Your mortgage payment will also go up if you have an adjustable-rate mortgage and your initial rate has come to an end.

Why is my mortgage total going up? ›

Missed payments and mortgage accounts in arrears

If you have missed any of your mortgage payments, in part or in full, the interest that has been added is calculated on the total balance outstanding which includes these missed payments, and any fees that may have been charged to the account.

Can your mortgage go up because of escrow? ›

Is this legal? Yes. If your bank determines that there will not be sufficient funds in your mortgage escrow account, it may raise your payment by the amount of the shortage. The bank may offer you the choice to repay the amount in one lump sum or spread the payments over a 12-month period.

Can you dispute an escrow increase? ›

If the case is similar to mine, talk to your bank so they can reevaluate the amount you should actually pay per month into escrow. If the increase occurred because the local tax auditor put a higher value on your home than anticipated, you can appeal your assessment with your local tax office or auditor.

Why does my mortgage keep going up because of escrow shortage? ›

Two main factors can cause an escrow shortage—and ultimately increase your mortgage payments: Your property taxes increased from the previous year. Your homeowner's insurance premiums rose from the last year.

Why did my mortgage go up $300 dollars? ›

A higher monthly mortgage payment doesn't necessarily mean you've done anything wrong. Mortgage payments can change even when the homeowner pays on time. Changes in your escrow account, property taxes, homeowners insurance or interest rate can increase the dollar amount of your mortgage loan payment.

Is it bad if mortgage rates go up? ›

In general, when interest rates are higher or increasing, the housing market slows down. When interest rates are going up, the cost of owning a home becomes more expensive due to the higher interest rate, which reduces demand. This reduction in demand then results in a drop in home prices.

Can I lower my mortgage payment by paying down principal? ›

Because interest is calculated against the principal balance, paying down the principal in less time on your mortgage reduces the interest you'll pay. Even small additional principal payments can help.

Can my mortgage go up without notice? ›

Occasionally, your mortgage payment may go up or down due to a property value reassessment. The frequency of property reappraisals can differ by location. It may happen once a year, every 2 years or only when a house changes owners.

Who is responsible for an escrow mistake? ›

This is a great question because there is a lot of onus placed on the buyer, even with an escrow account. While your loan servicer is the one responsible for handling your property tax and insurance payments, mistakes are made, and you are the one who will be held liable for the full, on-time payment.

How do I lower my escrow payment? ›

Lower your taxes

You can try to lower your property tax bill to reduce the escrow payment that typically makes up much of your monthly mortgage payment.

How can I lower my mortgage payment without refinancing? ›

How to lower your mortgage payment without refinancing
  1. Recast your mortgage. ...
  2. Cancel your mortgage insurance. ...
  3. Lower your homeowners insurance or property taxes. ...
  4. Consider a bi-weekly mortgage payment plan. ...
  5. Ask your lender for a loan modification. ...
  6. Pay off your loan.
Oct 6, 2023

Can I decrease my mortgage payment after increasing it? ›

Normally, once you increase your payments, you can't lower them until the end of the term. The term is the time that your mortgage contract is in effect including your interest rate and other conditions. The term can range from a few months to 5 years or longer.

What is the average mortgage payment increase? ›

The Consumer Financial Protection Bureau says the average payment for a home purchase loan surged more than 46%—from $1,400 per month to $2,045—over the 12 months ending December 2022. Likewise, the median total of costs and fees for such mortgages spiked almost 22% to nearly $6,000 in the same period.


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