Did You Just Get Notified That Your Mortgage Payment Is About to Adjust?

Before you rush to ask ChatGPT, Gemini, or your neighbor what’s going on, take a breath — chances are, there’s a simple explanation.

Remember when we broke down PITI — that’s Principal, Interest, Taxes, and Insurance — your full monthly mortgage payment? If you’re on a fixed-rate loan, your principal and interest haven’t changed. The bank didn’t randomly raise your rate.

So, what usually moves? The “T” and “I” — Taxes and Insurance.

Here’s why:

Most lenders collect money for property taxes and homeowners insurance through an escrow account. Each month, a portion of your payment goes into this account so the lender can pay those bills on your behalf. Once a year, they run an escrow analysis — basically a reconciliation.

They compare:

• What they estimated your taxes and insurance would be

• What they actually were

• And whether your account has a shortage or surplus

If your property taxes went up or your insurance premiums increased, your lender adjusts your payment to cover the gap and build a cushion for the next year.

But here’s the interesting twist — in Austin, with home values cooling off from their peak and some successful tax protest wins, we’re seeing more cases where monthly payments are going down.

If your taxes decreased or your escrow account has a surplus, your lender might:

• Lower your monthly payment

• Or even send you a refund check

The key takeaway: this adjustment isn’t your interest rate changing — it’s just escrow math catching up.

If you just got one of these letters and aren’t sure what you’re looking at, send it to me. I’ll walk you through it so you know exactly what changed — and whether it’s good news or not.