On a fixed-rate loan the principal and interest never change, so the increase is in the escrow portion: your property tax or homeowners insurance rose, or the annual escrow analysis found a shortage and is collecting it over the next twelve months, and on an adjustable-rate loan the rate itself may also have reset.
The mortgage statement most people read has one number on it, and that number is four things: principal, interest, and the monthly deposits toward property tax and insurance that the servicer holds in escrow and pays on your behalf. Fixed means the first two are fixed. The other two follow the tax bill and the insurance premium, and the servicer reconciles them once a year.
The escrow analysis
Once a year the servicer compares what it collected for taxes and insurance with what it actually paid, and projects the coming year. If the bills rose, the monthly deposit rises to match. If the account ended the year short, federal rules let the servicer collect the shortage over the next twelve months on top of the new deposit, and require it to keep a cushion of up to two months' worth. The result is a statement showing the new payment and the shortage, and the option to pay the shortage in a lump sum to keep the monthly increase smaller.
Insurance is the common culprit now: homeowners premiums have risen sharply in much of the country, and a $600 annual increase is $50 a month before any shortage. Property tax rises follow reassessment; in Nevada the abatement caps the increase on an owner-occupied home at three percent a year, but the cap resets when a home sells, so a first-year owner's bill can be far above the seller's last one.
The other reasons
An adjustable-rate mortgage past its fixed period resets to the index plus margin, usually once a year, within caps, and the statement will say so. Mortgage insurance can end (a decrease) or, on an FHA loan, continue for the life of the loan. A loan modification or forbearance repayment adds to the payment. A servicer transfer can produce a one-off change while the new servicer redoes the analysis. And a mistake: escrow analyses are wrong often enough that reading the tax and insurance figures against your own bills is worth the ten minutes.
What you can do
Check the analysis against the actual tax bill and insurance declaration. Shop the insurance; the servicer will pay whichever policy you name. Claim any tax exemption you are entitled to (in Clark County, the owner-occupied abatement has to be on file for the three percent cap to apply). Pay the shortage in a lump sum if you can, which removes the catch-up portion. And if the increase is the rate on an adjustable loan, compare a refinance to a fixed rate against the remaining adjustment schedule.
Questions people ask
Can a fixed-rate mortgage payment go up?
The principal and interest cannot. The total payment can, because it includes escrow deposits for property tax and insurance, and those rise with the bills. The annual escrow analysis is where the change is explained.
What is an escrow shortage?
The gap between what the servicer collected for taxes and insurance and what it paid out, usually because a bill rose mid-year. It is collected over the following twelve months, or in a lump sum if you choose.
Should I pay my escrow shortage in full?
If the cash is available, usually yes: it removes the catch-up portion of the new payment and costs nothing extra. The new, higher monthly deposit for the higher bills remains either way.