What is an escrow account on a mortgage?
An escrow account is money your servicer collects with your monthly payment to pay property taxes and homeowners insurance when they come due. Your payment can change when those bills change.
Closing Costs · Written by Anil Aggarwal, Realtor® | Mortgage Loan Officer · Updated August 8, 2026
At closing you typically fund the account with several months of taxes and insurance, which is part of cash to close.
Servicers review escrow annually and adjust the monthly amount, which is why a payment can rise even on a fixed-rate loan.
Some loans allow waiving escrow at certain equity levels, subject to lender rules.
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