Why my mortgage payment went up?

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If you’ve recently noticed an increase in your mortgage payment, you may be wondering why this has happened. Understanding the reasons behind a mortgage payment increase is essential for homeowners to effectively manage their finances. In this article, we will explore some common factors that can cause a mortgage payment to go up.

Adjustable Rate Mortgage (ARM)

One possible reason for an increase in your mortgage payment is if you have an Adjustable Rate Mortgage (ARM). With an ARM, the interest rate is not fixed and can fluctuate over time. Typically, ARMs have an initial fixed-rate period, after which the interest rate adjusts periodically based on market conditions. If interest rates rise, your mortgage payment will increase to reflect the higher rate.

Escrow Account Adjustments

Another factor that can cause your mortgage payment to increase is adjustments to your escrow account. An escrow account is set up by your lender to hold funds for property taxes, homeowners insurance, and other related expenses. If any of these costs increase, your lender may adjust your monthly payment to ensure there are sufficient funds in the escrow account to cover these expenses. This can result in a higher mortgage payment.

Property Tax Assessment

Property taxes are determined by local governments based on the assessed value of your property. If your property tax assessment increases, your mortgage payment may go up to accommodate the higher tax amount. Property tax assessments can increase due to various factors, such as improvements made to your property or rising property values in your area.

Homeowners Insurance Premium

Homeowners insurance is a crucial aspect of protecting your property. Insurance premiums can increase for several reasons, including inflation, changes in the value of your property, or an increase in the risk associated with your area. If your homeowners insurance premium goes up, your mortgage payment may also increase to cover the higher insurance costs.

Private Mortgage Insurance (PMI)

If you have a conventional loan and made a down payment of less than 20% of the home’s purchase price, you are likely required to pay Private Mortgage Insurance (PMI). PMI protects the lender in case the borrower defaults on the loan. The cost of PMI is typically added to your monthly mortgage payment. If the PMI rates increase, your mortgage payment will go up accordingly.


There are several reasons why your mortgage payment may have increased. It could be due to an adjustable rate mortgage, adjustments to your escrow account, property tax assessment changes, higher homeowners insurance premiums, or an increase in private mortgage insurance rates. Understanding these factors can help you better manage your finances and plan for any future changes in your mortgage payment.


1. investopedia.com
2. bankrate.com
3. nerdwallet.com