Why Does My Mortgage Keep Going Up in Pocatello, Idaho?
Buying a home in Pocatello is one of life’s biggest milestones—whether you’re settling near Idaho State University, in the foothills of Gibson Jack, or across from the Portneuf River. Most homeowners take comfort in knowing their mortgage payment will stay steady, especially with a fixed-rate loan. So when that payment unexpectedly increases, it’s natural to wonder: why is my mortgage payment going up?
Understanding the reasons behind these changes helps you plan, budget, and avoid surprises down the road. Below, we’ll break down the most common causes of rising mortgage payments in the Pocatello area and how to manage them.
Common Reasons Your Mortgage Payment Increases
Even if you’ve never missed a payment, your mortgage amount can still change over time. In Pocatello and across Bannock County, property tax assessments, insurance premiums, and escrow adjustments are the most common culprits.
1. Escrow Account Adjustments
Most lenders include an escrow account in your mortgage to collect funds for property taxes and homeowners insurance. When either of these costs goes up, your escrow payment must increase too.
Each year, your lender performs an escrow analysis to ensure enough funds are available. If there’s a shortfall—say, due to rising local property taxes—your lender spreads that shortage over future payments, increasing your monthly total.
Tip: Review your annual escrow statement carefully. Pocatello homeowners often see changes after county reassessments or insurance rate updates.
2. Property Tax Increases in Bannock County
Your property taxes are determined by Bannock County and the local taxing districts (such as school, road, or fire departments). These taxes can rise if your home’s assessed value increases or if the city approves new levies or bonds.
As Pocatello’s real estate market grows, especially in areas like Chubbuck or Highland, reassessments can lead to noticeable increases in annual tax bills—reflected directly in your escrow account.
Example: If your property tax bill rises by $240 a year, your lender may add about $20 per month to your mortgage payment.
3. Rising Homeowners Insurance Premiums
Idaho homeowners have seen insurance rates rise due to regional weather patterns, material costs, and inflation. Even moderate premium increases can impact your mortgage payment.
Common reasons your insurance costs might rise in Pocatello:
You remodeled or upgraded your home.
You increased coverage or added liability protection.
You switched insurance providers.
Your area experienced more claims from wildfires, windstorms, or flooding.
Tip: Shop insurance rates regularly—many Pocatello residents save by bundling home and auto coverage or adding a monitored security system.
4. Adjustable-Rate Mortgage (ARM) Resets
If you have an adjustable-rate mortgage, your initial interest rate is fixed for only a few years (typically 3, 5, or 7). When that period ends, the rate “resets” based on market conditions.
If national rates have risen since you bought your home, your payment could increase significantly.
What drives these changes:
Inflation and federal rate hikes.
Economic trends or bond market shifts.
Federal Reserve policy changes.
Example: Homeowners who purchased in Pocatello during low-rate years (2020–2021) may now see their ARM rates adjust upward.
5. Expired Servicemember Benefits
Active-duty members stationed at Mountain Home AFB or elsewhere may qualify for the Servicemembers Civil Relief Act (SCRA), which caps mortgage rates at 6%. Once active duty ends, that rate returns to its original level, potentially raising your payment.
How to Lower Your Monthly Mortgage Payment
Fortunately, there are several ways to reduce your monthly costs and keep your Pocatello home affordable.
1. Remove Private Mortgage Insurance (PMI)
If you purchased your home with less than 20% down, you’re probably paying PMI. Once you reach 20% equity, you can request its removal, potentially saving hundreds of dollars per month.
For FHA loans, mortgage insurance often lasts 11 years—or the life of the loan—unless you refinance into a conventional loan.
2. Refinance to a Lower Rate or Longer Term
Refinancing can help you:
Lock in a lower rate if market conditions improve.
Extend your loan term to reduce monthly payments.
Switch from an ARM to a fixed-rate loan for stability.
Work with a local lender familiar with Pocatello’s housing market to compare refinancing costs and long-term savings.
3. Shop Around for Homeowners Insurance
Since your premium is part of your escrow account, lowering it directly affects your monthly payment. Get quotes from multiple Idaho insurers and explore:
Bundled home and auto discounts.
Higher deductibles (if financially feasible).
Security system or loyalty discounts.
4. Appeal Your Property Tax Assessment
If your home’s assessed value seems inflated, you can appeal through Bannock County’s Assessor’s Office. Many homeowners pay more than necessary simply because they don’t contest their valuation.
Steps to appeal:
Review your assessment notice for errors.
Compare values of similar homes in your neighborhood.
File an appeal before the county’s posted deadline.
Provide documentation or hire an independent appraiser.
A successful appeal can lead to long-term savings on both taxes and your mortgage payment.
Frequently Asked Questions About Rising Mortgage Payments in Pocatello
1. Why is my mortgage increasing if I have a fixed-rate loan?
Your principal and interest stay the same—but property taxes and insurance costs can rise, which increases your escrow amount and total payment.
2. How often can my payment change?
Lenders usually review escrow accounts annually. Expect adjustments once a year unless you have an adjustable-rate mortgage, which can change more frequently.
3. Can I prevent my mortgage payment from going up?
Not completely—but you can reduce the impact by:
Comparing insurance quotes annually.
Appealing inflated property taxes.
Removing PMI when eligible.
Refinancing to a fixed-rate mortgage.
4. Why did my escrow shortage increase my payment?
If your escrow doesn’t have enough funds for taxes or insurance, your lender spreads the shortage across 12 months to balance your account.
5. Will refinancing lower my mortgage?
Yes—refinancing can reduce payments by securing a lower rate, extending the term, or removing mortgage insurance. It can also stabilize your payment by converting to a fixed rate.
Final Thoughts
A rising mortgage payment can feel stressful—but for homeowners in Pocatello, understanding why it’s happening is half the battle. Keep an eye on your escrow statements, insurance renewals, and county assessments each year.
By staying proactive and exploring options like refinancing, appealing your taxes, or removing PMI, you can protect your budget and maintain peace of mind in your Idaho home.
Michael Parker | Pocatello Real Estate Agent
As a trusted real estate professional in the Pocatello area, I’m here to guide you every step of the way. Whether you’re buying your first home or selling your current one, my goal is to help you achieve yours—smoothly, strategically, and successfully. Contact me today to start your journey toward finding your perfect home in Pocatello.