Why has my mortgage balance gone up?
Usually because interest has been added and no payment has reduced it yet. Interest is charged on what you owe, so between payments, after a missed or partial month, or when a fee is added to the loan, the balance can rise even on a repayment mortgage.
On a repayment mortgage the balance is meant to fall, so seeing it go up is unsettling. There is nearly always an ordinary explanation, and most of them come down to when interest is added compared with when a payment lands.
Between payments, where interest is worked out daily
Some lenders work out interest daily and show a balance that includes the interest built up since your last payment. On £200,000 at 5%, that is about £27 a day. Look at the balance the day before your payment and it can be several hundred pounds higher than the day after — then the payment lands and it falls again. Across a year it still goes down; within a month it rises and falls.
After a missed or partial payment
Interest is added whether or not a payment arrives. On £200,000 at 5%, a month’s interest is about £833. If no payment is made that month, the balance goes up by about £833 instead of down by about £336. A payment smaller than the interest does the same thing on a smaller scale.
A payment holiday or payment break agreed with your lender works the same way: interest keeps building while no payment is taken, and it is added to the balance.
When something is added to the loan
- A fee added to the mortgage. A product or arrangement fee added to the loan rather than paid up front makes the balance larger by the amount of the fee, and interest is then charged on it too.
- Charges on missed payments. Arrears or administration charges can be added to the balance.
- Borrowing more. A further advance is new borrowing added to what you already owe.
On an interest-only mortgage
The monthly payment is set to match the interest, so the balance is not meant to fall at all. If a fee is added, or the rate rises before the payment is adjusted, it can creep up.
What it is not
An overpayment does not increase the balance. If you have overpaid and the balance still looks higher, it is usually timing: the overpayment and the interest landing on different days, or a statement dated before the payment was applied.
Checking it on your own mortgage
Your annual statement shows interest charged, payments received and anything added, line by line — how to read your annual mortgage statement goes through it. If the balance has gone up and none of the reasons above fits, your lender can tell you what was added and when, and their answer is the authoritative one. For a balance that falls slowly rather than rising, see why is my mortgage balance not going down.
Questions people ask
Can a mortgage balance go up if I pay every month?
Yes, for a short time. Where interest is worked out daily, the balance includes interest built up since the last payment, so it rises between payments and falls when a payment lands. Across a year a repayment mortgage still falls.
How much does a missed mortgage payment add?
A month's interest, plus any charges your lender applies. On £200,000 at 5% a month's interest is about £833, so the balance rises by about that instead of falling. Your mortgage offer and your lender's tariff of charges set out the rest.