How to Keep Your Mortgage Payment from Rising Every Year

3 simple ways to minimize increases even with a fixed-rate mortgage loan

If you’ve ever been surprised by a mortgage payment increase—even though you have a fixed-rate loan—you’re not alone. We recently wrote about why this happens in our article Why Do My Mortgage Payments Go Up Every Year When I Have a Fixed-Rate Mortgage?

In short: even if your principal and interest stay the same, your total monthly payment can still rise due to increases in property taxes and homeowners insurance, both of which are typically paid through your escrow account.

The good news? While you can’t always control rising property values or market insurance rates, there are proactive steps you can take to help minimize your annual increases and avoid unexpected escrow shortages.

Here are three things every homeowner should do each year to help keep their monthly mortgage payment from creeping up more than necessary.

1. Shop Around for Homeowners Insurance Annually

Homeowners insurance is a major component of your monthly escrow payment—and premiums increase year over year. Many people stay with the same insurance provider for years, even as their premiums climb.

Why it matters:

If your insurance premium increases, your mortgage servicer will adjust your escrow account to cover the higher cost, resulting in a higher monthly payment. An increase will also trigger an escrow shortage.

What you can do:

Treat your insurance like any other major bill—shop it annually. Every year or two, get a few quotes from reputable insurance providers and see how your current policy compares. You might find similar coverage at a lower cost, or you may discover it’s time to make adjustments based on changes to your property or coverage needs.

Tip: If you do find a better deal, contact your mortgage servicer before switching policies. You’ll want to make sure the new policy is accepted and updated in your escrow account.

2. File for a Homestead Exemption (If You’re Eligible)

If your property is your primary residence, you may be eligible for a homestead exemption, which can reduce the amount of property taxes you owe each year. This exemption can make a noticeable difference in your annual tax bill—and, in turn, your monthly escrow payment.

Why it matters:

Lower property taxes = lower escrow requirements = a more stable (and affordable) monthly payment.

What you can do:

Check with your county or local tax assessor’s office to see if your municipality offers a homestead exemption and how much. Requirements and deadlines vary by location, but most areas—like Pennsylvania and Florida—do offer this benefit.

Important: Filing is often a one-time process, but it’s essential to make sure it’s done promptly after purchasing your home. If you’re unsure whether you’ve already filed, you can typically confirm with your local tax office.

3. Plan for a Small Escrow Shortage Each Year

Even with insurance shopping and tax exemptions, some changes are beyond your control. Property taxes will rise, mainly due to reassessments. Insurance companies may increase premiums due to market shifts or weather-related risk factors.

Why it matters:

Even a small increase in your annual escrow obligations can result in a shortage—which your mortgage servicer will recover by either increasing your monthly payment or requesting a lump-sum catch-up payment.

What you can do:

Build an annual “escrow cushion” into your budget. Setting aside even $50–$100 per month into a savings account can help prepare you for any shortage your mortgage company identifies during the annual escrow analysis.

By expecting small fluctuations each year and saving accordingly, you reduce your risk of payment shock and give yourself more flexibility to handle changes without stress.

Final Thoughts

It’s frustrating to think your mortgage payment will go up even when your rate doesn’t—but now you know why it happens, and more importantly, what you can do about it.

By:

• Getting competitive homeowners insurance quotes every year to two
• Filing (or confirming) your homestead exemption
• Preparing in advance for minor escrow adjustments

—you’ll have more control over your monthly budget and avoid the surprise of an unexpected payment hike.

And remember, we’re always here to help. Whether you’re exploring refinancing, budgeting for your first home, or just need guidance understanding your escrow statement, Innovative Mortgage Brokers is here to walk you through it all with honest advice and personalized service.

About Innovative Mortgage Brokers

At Innovative Mortgage Brokers, we provide tailored mortgage solutions to homebuyers and homeowners across Pennsylvania and Florida. With over 15 years of experience, we combine expert guidance with a personal touch—making the mortgage process faster, easier, and more transparent. Whether you’re buying your first home, refinancing, or navigating escrow questions, we’re here to help every step of the way. Our goal is simple: help you make smart, confident decisions about your mortgage.