See your monthly escrow payment and the deposit due at closing, then audit your annual analysis for a shortage, surplus, or refund.
Free escrow calculator that turns annual property tax, homeowners insurance, and flood premiums into one monthly number, estimates the initial escrow deposit on your Closing Disclosure, and recreates the RESPA analysis math behind a payment change.
Assumes property taxes disburse in two halves in April and October and insurance renews as one payment 12 months after the closing. The balance climbs with each payment and drops when a bill is paid; the dashed line is the cushion the servicer is allowed to hold.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
A servicer-held account that pays your property taxes and insurance.
Your servicer collects 1/12 of your annual property tax and homeowners (plus flood) insurance with each monthly payment, parks it in an escrow account, and pays those bills on your behalf when they come due. It is a pass-through account: none of it touches your loan balance.
The annual analysis found a shortage, usually from higher taxes or premiums.
Once a year your servicer projects the next 12 months of bills and finds the lowest point your balance will hit. If that low point falls below the allowed cushion, the gap is a shortage. Your new payment becomes the new base amount plus the shortage spread over 12 months, so one tax reassessment can raise the payment twice over.
Surpluses of $50 or more must be refunded to you.
Under RESPA, if the annual analysis shows your projected low balance sits more than the allowed cushion above zero, the excess is a surplus. A surplus of $50 or more must be refunded to you within 30 days; under $50, the servicer may simply credit it against upcoming payments.
Almost never; you pay the association directly.
Servicers do not escrow HOA dues except in rare specialty loans, because the association bills you, not the lender. That is why this calculator keeps HOA out of the escrow math: budget for it separately, on top of your PITI payment.
The mechanics in short answers. No jargon, no upsell.
Property tax, homeowners insurance, flood insurance, and any other escrowed items are added together, and 1/12 of that total rides on each monthly mortgage payment. HOA dues stay out: servicers almost never escrow them.
The servicer projects a full year of payments in and bills out, finds the lowest point the balance would hit, and collects enough at closing that the balance never dips below the allowed cushion. Timing matters: closing just before a tax due date means a bigger deposit.
The annual escrow analysis projects the next 12 months from your current balance. If the projected low point falls below the cushion, the gap is a shortage; if it sits above the cushion, the excess is a surplus.
A shortage is typically spread over 12 months: new payment = base payment + shortage / 12. A surplus of $50 or more must be refunded to you; smaller amounts may be credited against future payments.
Worked example: On a $400,000 home at 1.2% tax with $1,500 insurance and 0.6% PMI on a $320,000 balance, the annual escrow bill is $4,800 + $1,500 + $1,920 = $8,220, so the monthly escrow payment is $685 and a 2-month cushion is $1,370.
The 30-year projection assumes taxes and insurance creep 3% a year and drops PMI once straight-line principal paydown reaches 20% equity, a simplification of how servicers actually run annual escrow analyses. Everything runs locally in your browser; your numbers never leave this page.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Annual taxes and insurance divided into the monthly escrow payment your servicer will actually bill.
An aggregate-accounting estimate of the "initial escrow deposit" line on your Closing Disclosure, driven by your closing month.
Recreate the RESPA shortage/surplus math from your statement and check whether the new payment your servicer quotes is right.
Project year-2 escrow growth so the next re-analysis does not blow up your budget.
Servicers may hold up to 2 months of payments in reserve. Model 0, 1, or 2 months and see what each costs at closing.
Cross-check the lender's escrow and prepaid figures on your Loan Estimate or Closing Disclosure in seconds.
Everything you might ask before, during, or after using this tool.
RESPA caps the cushion at 2 months of escrow payments, which is 1/6 of your annual disbursements. Servicers may hold less, and a handful of states cap it lower or require none. The cushion is collected as part of your initial escrow deposit at closing, then rolls forward year to year.
The standard treatment is to spread it: your new monthly payment equals the new base amount (annual disbursements divided by 12) plus the shortage divided by 12 for the next year. Most servicers also let you pay the shortage as a lump sum, which drops the monthly payment back to the base amount immediately.
Often yes, on conventional loans once your equity is 20% or more (loan-to-value at or below 80%). Lenders typically charge a small rate add-on or a one-time fee for the waiver, and FHA loans require escrow for the life of the loan. You then pay the tax authority and insurer directly.
Nothing until the next annual analysis. When it runs, the higher tax bill raises the base payment and usually also creates a shortage, because the account collected at the old rate while the county billed at the new one. That is why a reassessment often hits the payment twice: higher base plus a 12-month catch-up.
Almost never. Servicers do not escrow HOA dues because the association bills the homeowner directly; only a few specialty programs ever require it. That is why this calculator excludes HOA from the escrow math. Budget for dues separately, on top of the PITI payment.
No. Escrow payments are held separately and sent to your tax authority and insurer. Only your principal-and-interest payment reduces the loan balance. Escrow is a pass-through bookkeeping account, not a paydown mechanism.
In most U.S. states, lenders are not required to pay interest on escrow balances and don't. A handful of states (including California, New York, and Massachusetts) mandate at least minimal interest on escrow accounts. Check your state's rules.
Your servicer closes the escrow account and refunds any remaining balance within 20 business days (federal rule). After that, you're responsible for paying property taxes and homeowners insurance directly to those entities going forward.
Other Lazysmirk tools that pair well with this one.
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Estimate your cash to close in any of the 50 states plus DC: lender fees, title, per-state transfer taxes, prepaids, and seller credits, itemized.
Escrow is the part of your monthly mortgage payment that doesn't pay down the loan. Instead, your servicer collects roughly 1/12 of your annual property tax, homeowners (hazard) insurance, PMI, and sometimes HOA dues each month and parks it in a dedicated escrow account.
When those bills come due (property tax twice a year in most U.S. counties, insurance once a year), the servicer pays them out of the escrow balance on your behalf. You never see the bill, you never write the check. The trade-off is that the lender controls the timing and the cushion size, not you.
A rough rule of thumb: on a typical U.S. home with 1.0–1.3% property tax and standard insurance, escrow runs 20–35% of your total monthly mortgage payment. On a $400k home with a $320k loan at 7%, you're looking at roughly $475–$550/month in escrow on top of about $2,130 in principal and interest.
High-tax states change that math dramatically. New Jersey, Illinois, and parts of Texas can push escrow above $1,000/month on the same home, while Hawaii, Alabama, and Colorado keep it under $400. Always check your county's effective tax rate before assuming national averages.
Federal RESPA rules let servicers hold up to 2 months of escrow payments as a buffer. The cushion exists because property taxes and insurance bills are lumpy: a $6,000 tax bill drops into the account once or twice a year, and the servicer needs the balance to stay positive even if collections lag disbursements by a few weeks.
You pay this cushion at closing as part of your prepaid items, which is why closing costs always include a line called "initial escrow deposit." Once you're past closing, the cushion sits there and rolls forward; you don't pay it again unless the analysis says it dipped below the required floor.
If your loan-to-value is under 80% and the lender allows it, waiving escrow gives you direct control of about $5,000–$15,000/year of cash flow. You earn float on the money in a high-yield savings account between when you collect it and when the bill is due, typically a $50–$200/year benefit at current rates.
The downsides: most lenders charge a 0.125–0.25% rate add-on or a one-time fee for waiving escrow, you take on the risk of forgetting a payment (tax liens and lapsed insurance are catastrophic), and your monthly payment looks smaller in a misleading way. For disciplined savers with stable cash flow, waiving can win on math. For everyone else, escrow is the safer default.
Two short notes worth reading before you trust any number on this page.
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