WASHINGTON - Who is paying for the two-month extension of the payroll tax cut working its way through Congress? The cost will be dropped in the laps of most people who buy homes or refinance beginning next year.

Starting Jan. 1, those who buy a $200,000 home or refinance that amount will pay roughly $17 more a month for their mortgages, thanks to a fee increase included in the bill the Senate passed Saturday. The White House said the fee increase would be phased in gradually.

The legislation provides a two-month extension of the tax cut and long-term unemployment benefits that would otherwise expire on Jan. 1. It would also delay for two months a cut in Medicare reimbursements for doctors that is scheduled to take effect on New Year's Day. The House is expected to act on the bill early in the week. Two more months of the Social Security tax cut amount to a saving of about $165 for a worker making $50,000 a year.

To cover its $33 billion price tag, the measure increases the fee the government-backed mortgage giants Fannie Mae and Freddie Mac charge to insure mortgages. That fee, which Senate aides said currently averages around 0.3 of a percentage point, would rise by 0.1 of a percentage point under the bill. The increase will also apply to people whose mortgages are backed by the Federal Housing Administration, which typically serves lower-income and first-time buyers.

The higher fee would not apply to people who currently have mortgages unless they refinance next year.

Because of the weak housing market and the huge numbers of foreclosures in the last few years, private insurers have not competed strongly for business with Fannie Mae and Freddie Mac, which have the backing of the federal government. As a result, about nine in 10 new home mortgages are backed by Fannie Mae, Freddie Mac, or the FHA.

President Obama and many congressional Democrats and Republicans want to curb Fannie Mae's and Freddie Mac's dominance in the mortgage market. Obama this year proposed raising the mortgage guarantee fees they charge as one way to do that.