Home Insurance Now Consumes Nearly 10% of Mortgage Payments
- Neil Caron
- Sep 21
- 2 min read
September 21, 2025 | Data & Mortgage Insight | Presented by ReadySetLoan™️
For decades, homeowners focused primarily on interest rates when calculating affordability. But today, insurance premiums are stealing the spotlight—and the dollars. As of this summer, property insurance now makes up nearly 10% of the average monthly mortgage payment. That’s the highest share ever recorded, and it’s reshaping the affordability equation for millions of buyers.
The Insurance Squeeze
While principal and interest payments rise and fall with market rates, insurance costs have been on a relentless upward climb. In the last five years, home insurance premiums have surged nearly 70%, far outpacing the growth in other mortgage components. Even in 2025—when interest rates are finally beginning to cool—insurance remains a stubborn and costly line item in the housing budget.
For Connecticut homeowners, the pain is real. Along the shoreline and in communities like Mystic, Old Saybrook, and Fairfield County, storm risk and coastal exposure have pushed premiums higher than ever. Inland towns like Manchester and Glastonbury haven’t been immune either, as inflation in construction costs drives replacement coverage higher across the board.
RSL Piggy Points 🐷💡
Insurance now eats up 1 in 10 mortgage dollars—a dramatic shift in household budgets.
Over five years, premiums have grown nearly three times faster than principal, interest, or taxes.
Connecticut shoreline buyers are especially impacted, but even inland towns face higher replacement costs.
Escrow accounts are adjusting upward—meaning homeowners can expect bigger all-in monthly payments.
Unlike interest rates, insurance costs don’t “float down” easily—once set, they tend to stick.
Neil’s Take 🎙️
Neil Caron, Area Sales Manager at CMG Mortgage, explains:
“When we talk about affordability, everyone looks at interest rates. But in today’s market, insurance has quietly become the fourth leg of the stool. In Connecticut, especially along the shoreline, families are shocked to see just how much insurance pushes up their monthly payments. It’s now a factor that can make or break a deal.”
What Connecticut Buyers and Homeowners Can Do
Shop smarter: Don’t accept the first insurance quote. Comparing providers can save hundreds annually.
Bundle wisely: Auto + home packages often come with premium discounts.
Adjust deductibles: Raising your deductible can lower monthly costs—but make sure it’s a manageable number in an emergency.
Invest in mitigation: Storm shutters, sump pumps, and home security systems can all reduce premiums.
Plan for escrow bumps: Rising premiums mean higher escrow contributions—budget accordingly.
RSL Perspective
At ReadySetLoan™️, we believe that homeownership success is about the whole picture, not just the rate. Insurance, taxes, and maintenance are equally critical to the race. The fact that insurance now makes up 10% of mortgage payments is a wake-up call: buyers must prepare for more than the headline mortgage rate.
For Connecticut homeowners, the message is clear—insurance is now a front-runner in the affordability race. By staying informed, shopping aggressively, and planning ahead, you can keep your monthly payments under control and still cross the finish line with confidence.
🏁 Final Lap: ReadySetLoan™️ is here to help you navigate every cost of homeownership—not just the mortgage. From understanding how insurance impacts your budget to building a smart homebuying plan, ReadySetLoan™️ is your educational partner and guide.
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