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Why did my mortgage payment go up?

On a fixed-rate loan, a higher payment usually comes from escrow, the part your servicer sets aside for property tax and homeowners insurance. When those bills rise, the payment goes up twice: once for the bills, and again for a catch-up that typically lasts a year. Put in your old and new payment to see what moved yours.
Your Payment
Monthly payment before the change
Monthly payment now
The whole payment, as it shows on your mortgage statement.
Fixed-rate loan, with no loan changes this year?
Your Bills and Statement (Optional)
Add what you have. Anything left blank shows as not entered.
Property tax for the year
Last year
This year
Homeowners insurance for the year
Last year
This year
Shortage on your escrow statement
Amount
Months
The yearly escrow statement from your servicer shows any shortage and the months it is spread over (12 if blank). Leave it blank if you do not have the statement.
Why It Went Up
Example
Payment up
+$280 a month
From $2,150 to $2,430
Tax and insurance bills+$120
The change in your yearly bills, divided by 12.
Property tax+$40
Up $480 a year, from $3,600 to $4,080. $480 / 12 = $40.
Homeowners insurance+$80
Up $960 a year, from $1,800 to $2,760. $960 / 12 = $80.
Catch-up for a shortage+$160
$1,920 shortage / 12 months = $160. It ends after 12 months, unless your statement spreads it longer.
Bigger cushionin the catch-up
Your servicer may hold a cushion of up to 1/6 of a year's bills. That limit is $1,140 now, up from $900. Up to $240 more is already inside the $1,920 shortage (about $20 a month, est.), so it is not added again.
Principal and interest$0
Fixed-rate loan with no changes: this part stays the same.
Not explained by these numbers$0
Payment change+$280
From $2,150 to $2,430 a month.
The parts add up to the change.
What Happens Next
The $160 catch-up ends after 12 months. If your tax and insurance hold steady, your payment should drop by about $160, to about $2,270 a month (est.).
Bought in the last year or two?
Your first escrow was often set from the seller's tax bill, which may have had the seller's homestead exemption (a tax break for owners who live in the home) or an older assessed value. The county may reassess at the price you paid, so the first analysis after you buy can bring a bigger jump.
What You Can Do
  • Ask your servicer for the escrow analysis.
    Your servicer (the company you send the payment to) must send a yearly escrow statement within 30 days of the end of your escrow year. It lists the bills it expects to pay, any shortage, and the new payment. If you cannot find it, ask for a copy.
  • Pay the shortage at once, or spread it.
    Spread over 12 months$2,430 a month for 12 months
    Paid at once ($1,920 now)about $2,270 a month (est.)
    Paying at once lowers the payment; spreading keeps the cash. The choice is yours. Your shortage is at least one month of escrow (about $570, est.), so the rules let your servicer leave it or spread it over at least 12 months, but not make you pay it at once. You can still offer to; the CFPB says servicers may accept it.
  • Shop your homeowners insurance.
    Your premium rose $960 a year (53%), from $1,800 to $2,760. Quotes from other insurers can come in higher or lower. If you switch, send the new policy's declarations page (its one-page summary) to your servicer so it pays the right company.
  • Check your county's appeal window.
    Your tax bill rose $480 a year (13%). If the assessed value (the value your tax is based on) looks too high, you may be able to appeal it. Your county sets the deadline and the window can be short, so check your county assessor's website.
  • Ask for a new analysis when a bill drops.
    After a cheaper policy, a successful appeal or a new homestead exemption, ask your servicer to run the escrow analysis again. It may lower your payment; that is up to the servicer.
  • A surplus comes back to you.
    If an analysis finds more in the account than it needs, a surplus of $50 or more must be refunded within 30 days, as long as you are current on your payments.
This explains the usual escrow math with the numbers you enter; it is not advice, and your servicer's escrow statement is the final word. Nimbus is not a lender, lawyer or tax adviser, so check with your servicer, your county or an insurance agent before you act. The rules are in 12 CFR 1024.17 (Regulation X), on the Consumer Financial Protection Bureau's site, and its mortgage servicing FAQs cover paying a shortage at once.
Learn: how escrow works
What escrow is
Your servicer adds 1/12 of your yearly property tax and homeowners insurance to each payment, holds it in an escrow account, and pays those bills when they come due.
Why a payment jumps twice
Once a year the servicer runs an escrow analysis and resets the payment. If your bills went up, the new payment covers the higher bills. And because last year's payments were set for the old bills, the account came up short. That shortage is usually spread over the next 12 months or more as a catch-up, and then it ends.
New escrow = next year's bills / 12 + shortage / 12
The cushion
The servicer may also keep extra in the account, called a cushion, of up to 1/6 of a year's bills (about two months). When your bills rise, the cushion can rise too. That increase is collected as part of the shortage, not as a separate charge.

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