Can a mortgage compant increase your payment if you have a fixed mortgage?

My mortgage keeps increasing every year. I have a fixed mortgage. They told me there is a shortage in my escrow so I need to pay $168 more. Can they do that?

Asked on May 25, 2016 under Real Estate Law, Georgia


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If you have a fixed rate mortgage, then your principal and interest payment cannot be increased. However, legally there can be an change in payments to account for increases in escrowed items, such as taxes and homeowner's insurance. I suspect, the latter are what has caused your monthly payment to go up.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

They can only charge you what the mortgage agreement says they can, so review its terms carefully. If the agreement allows increases in the event of an escrow shortfall, for example, and there is a shortgage, then they may charge you whatever increases the agreement (which is a contract) allows. If they violate the terms of the agreement and charge you more than permitted, you could sue them for breach of contract.

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