You thought you escaped the landlord bumping rent up 10% each year...

Didn't you?

Here are a couple of reasons why your mortgage payment could go up.

Property tax increases

Homeowners insurance increase

If you took on an ARM loan instead of 30 year fixed

If you live in Canada and have to renew every 5 years

You took on one of those temporary rate buydowns

Your mortgage servicer made a mistake

I'll give you a few more details on each of these.

Property tax increase

If your mortgage payment includes an escrow payment, then you will likely see an increase in your mortgage payment.

I've never seen property taxes go down.

The rule "what goes up must come down" does not apply here.

If a $1,800 property tax bill goes up by 4% the following year, then it would be $1,872 the next year.

That adds $6 per month to your mortgage payment.

That's an example.

Some areas get special projects and need property taxes to fund it. So it can be localized. and some areas can get hit harder than others.

Homeowners insurance

This has been a hot topic over the past few years and received a lot of media reporting about insurance premiums skyrocketing.

If insurance companies end up paying out a lot of claims in your area, you can bet on premiums increasing in your area.

Here is an estimate on changes from 2024 to 2025 in homeowners insurance premium changes (your area could definitely be different, these are just average estimates for the state)

State	Change in HOI '24-'25.
WV	+92.1%
IN	+74.2%
AK	+73.2%
OR	+72.9%
MO	+67.4%
OH	+64.6%
VT	+56.7%
PA	+55.0%
NV	+53.1%
ID	+53.0%
UT	+50.2%
DE	+43.3%
VA	+41.5%
WY	+40.3%
CT	+39.3%
WI	+38.0%
AR	+33.7%
TN	+31.2
NJ	+31.8%
MT	+29.9%
NM	+27.2%
CO	+27.6%
IL	+27.6%
NH	+24.7%
NC	+19.2%
SD	+18.2%
MI	+18.2%
IA	+16.0%
OK	+16.3%
GA	+14.2%
KS	+14.2%
ME	+13.4%
WA	+12.7%
AZ	+11.7%
AL	+11.7%
SC	+10.7%
MD	+9.9%
ND	+9.3%
NY	+4.1%
MS	+2.9%
KY	+1.5%
TX	-0.8%
MA	-1.9%
CA	-5.1%
MN	-6.1%
RI	-6.9%
NE	-13.4%
LA	-16.3%
FL	-20.0%
HI	-49.0%

(Florida surprisingly has seen a decrease. Maybe from 2023 to 2024 they really jacked them up, then 2025 dropped them down.)

ARM loans

ARM loans are adjustable rate mortgages. They give teaser rates that are fixed for a time, then they can shift.

A 5/1 ARM is a mortgage that is fixed for 5 years then may adjust every year after that.

They have caps on how much it can fluctuate.

Depending on where rates are when your fixed period is up, you may have an increase in payment, or a decrease.

(30 year fixed loans don't work like this btw)

I've posted more about arms here

If you live in Canada

I only know this because my wife's friends visited from Canada.

Apparently you have to renew every 5 years or so.

You have to re-qualify for new terms.

They were saying that people were turning in their homes for foreclosure because they can't afford the new payment after their 5 years were up.

I thought Canada would see a huge jump in foreclosure rates because going from 2020 rates to 2025 rates sounds awful.

But in Canada the rates are similar, in fact, they might be lower than 2020.

Depending on your new Canadian loan terms, you might see an increase in payment.

Temporary buydowns

If you were promised by your overconfident loan officer that "rates will come down in 2025" and you're still waiting... you might see an increase in your payment as your loan anniversary comes along.

Temporary buydowns only lower your payment for the first year or two, sometimes 3.

But they mostly work on a graduated system. a 321 buydown for example works like this Year 1 the payment is low.

Year 2 it's a little higher,

year 3 higher.

Years 4+ is what you're stuck with if you don't refinance.

I've posted a little more about how they work here

Your mortgage servicer made a mistake

If your lender went off of some bad information, like thought property taxes were a lower amount than they really were, then you'll see a correction.

That correction might be a temporary increase to your mortgage payment to help cover the shortage.

It's called a negative escrow balance.

When you have a negative escrow balance it means your mortgage servicer paid out more than you had available for taxes or insurance.

You can't have a negative escrow balance for long. You have to start saving for next year's payment too. So they'll accelerate/catch up your escrow account to be ready. This results in you paying more each month to make it up.

on the flip side, If you've been paying too much because of a servicer mistake, they will refund you.

Surprise!