Mortgage costs can change — here’s how to plan
Plain-language guidance to help you budget and avoid surprises.
Yes, mortgage costs can go up
Even after you buy, your monthly cost can rise. The most common reason is interest rate changes (depending on your mortgage type), but taxes and insurance can change too.
Key point A budget that only works at today’s rate can become stressful at renewal or after rate changes.
Common ways your payment changes
- Variable-rate mortgages: payments or amortization can change when rates change
- Renewals: the new rate may be higher (or lower) than your previous term
- Escrow changes: if property taxes or insurance are collected monthly, the required amount can change
- Refinancing: fees and new terms can change total cost
Stress-testing your budget
A practical approach is to test your budget at higher payment levels and decide what would need to change if costs rise.
- Calculate payment scenarios at multiple rates
- Keep an emergency buffer and avoid maxing affordability
- Review renewal options early rather than at the last minute