# Why did my mortgage payments go up? **URL:** \ **Category:** Factual Questions\ **Created:** [July 28, 2011, 4:30pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634 "2011-07-28T16:30:07Z")\ **Posts on this page:** 9\ **Page:** 2
**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\ **Post date:** [July 28, 2011, 6:18pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/21 "2011-07-28T18:18:10Z")
> [@Finagle](#): > > I think they usually only re-evaluate escrow deductions once per year. So the OP may be building up an escrow surplus for the next year, probably not just a few months. True. My bank seems to re-examine it twice a year. It’d probably be worth a few minutes of the OP’s time to talk to a customer-service rep at his mortgage holder. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 28, 2011, 6:32pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/22 "2011-07-28T18:32:36Z")
> [@Machine\_Elf](#): > > My guess is that the OP bought his house about a year ago at a price substantially higher than his seller, and didn’t account for the fact that the property tax bill would reset (sometime within a year of purchase) due to city’s reassessment of the property value; it’s likely his monthly payment has gone up to keep up with the new tax rate, and also went up another increment to pay back the debt that built up in his escrow account over the past year. This. Almost certainly. And if that is what happened, the increase should go down by about half next year (since you will no longer have a shortage in the escrow account). ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 28, 2011, 7:09pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/23 "2011-07-28T19:09:02Z")
Yes, $150 means your property taxes (or insurance, or both) went up about total of $1800. Yikes. The $105x12months will probably pay back the difference on last year’s taxes, since for a while (12 months?) you were not paying enough. Next year that should disappear. The $78x12months will give you a buffer of $936, which is probably enough to cover any tax increases. I assume it stops in 12 months too. As posters above said - you probably got a huge tax increase when the city reassessed a newly sold house. From now on only city council spending and insurance increases will hit you up, and hopefully that won’t cause a more-than-$1000 hit in a year, so next time you won’t be dinged for a recovery. So expect to lose the $105 and $78 next year, but see smaller increases every year from now on. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [July 28, 2011, 7:13pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/24 "2011-07-28T19:13:15Z")
> [@Chessic\_Sense](#): > > … > > That wasn’t enough, though, so they had to go negative on your escrow account. They want you to pay that back. That’s the “shortage” fee they’re charging you… Not necessarily even _negative_ - if your monthly escrow is estimated at, say, 400 a month, they want X months minimum balance in the account. If it’s 2 months, that’s 800 total. If your taxes went up by a total of 300, then your minimum balance would be 500 if you keep at the current payment. So they want you to make up that 300 (divided by 12) for next year’s bill, which raises your escrow from 400 to 425, then they want you to make sure your escrow won’t be below 850 (425 times 2), so you’d have to bump it up a bit for that as well. Say, another 25 a month or whatever it works out to be. Then the following year, if your taxes don’t change, you would just pay the 425.00. And yes, if they drop - your escrow might decrease AND you might get a bit back. The one thing that irks me about escrow is the bank hold on to the money, and pays you no interest on it. Admittedly, it wouldn’t be a lot, and they do some paperwork handling for you, but still… Our mortgage is with a credit union and they actually _do_ pay interest… 56 cents last month :D. ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [July 28, 2011, 7:20pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/25 "2011-07-28T19:20:07Z")
> [@Mama\_Zappa](#): > > … > The one thing that irks me about escrow is the bank hold on to the money, and pays you no interest on it. Admittedly, it wouldn’t be a lot, and they do some paperwork handling for you, but still… Our mortgage is with a credit union and they actually _do_ pay interest… 56 cents last month :D. Depends on the state. Some states require that banks pay interest on funds held in escrow accounts. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 28, 2011, 7:55pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/26 "2011-07-28T19:55:13Z")
> [@md2000](#): > > So expect to lose the $105 and $78 next year, but see smaller increases every year from now on. I would expect to see him lose the $105 next year, but the $78 represents the difference in the old v. new tax rate. Although he won’t pay that separately next year, his escrow payment would likely climb at least that much since it is the “new” tax rate. ---
**Author:** ![chorpler](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chorpler/32/2888_2.png) [@chorpler](https://boards.straightdope.com/u/chorpler)\ **Post date:** [July 28, 2011, 8:59pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/27 "2011-07-28T20:59:41Z")
> [@jtgain](#): > > I would expect to see him lose the $105 next year, but the $78 represents the difference in the old v. new tax rate. Although he won’t pay that separately next year, his escrow payment would likely climb at least that much since it is the “new” tax rate. Wait, now I’m confused … I thought it was the $152 that was the difference in the old vs new tax rate, while the $105 was to make up for the amount underpaid last year and the $78 was to build back up the reserve the bank requires since it was depleted by the (unknown to the OP) increase in property tax rates … so the amount of increase would depleted not only the existing reserve but an additional amount that the $105/month extra is currently paying for. What am I misunderstanding? ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [July 28, 2011, 10:06pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/28 "2011-07-28T22:06:12Z")
> [@Mama\_Zappa](#): > > . . . The one thing that irks me about escrow is the bank hold on to the money, and pays you no interest on it. Admittedly, it wouldn’t be a lot, and they do some paperwork handling for you, but still… Our mortgage is with a credit union and they actually _do_ pay interest… 56 cents last month :D. > [@yabob](#): > > Depends on the state. Some states require that banks pay interest on funds held in escrow accounts. Citibank has been paying me interest on the escrow and I’m pretty sure they wouldn’t if it wasn’t required. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 28, 2011, 10:29pm UTC](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634/29 "2011-07-28T22:29:56Z")
> [@chorpler](#): > > Wait, now I’m confused … I thought it was the $152 that was the difference in the old vs new tax rate, while the $105 was to make up for the amount underpaid last year and the $78 was to build back up the reserve the bank requires since it was depleted by the (unknown to the OP) increase in property tax rates … so the amount of increase would depleted not only the existing reserve but an additional amount that the $105/month extra is currently paying for. > > What am I misunderstanding? You are correct. I should read for comprehension. 🙂 [Previous page](https://boards.straightdope.com/t/why-did-my-mortgage-payments-go-up/590634.md?page=1)