Escrow Payment Calculator
Turn annual property taxes and insurance into the monthly escrow your lender collects — plus the cushion reserve required at closing.
How it works
Monthly escrow = (annual taxes + insurance + PMI) ÷ 12 · Cushion reserve = monthly escrow × cushion months (federally capped at 2)
Lenders collect property taxes and insurance a little each month, hold them in an escrow account, and pay the bills when they come due — so your total mortgage payment is principal and interest plus this escrow amount. At closing they also collect a cushion, capped at two months of escrow under federal RESPA rules, to cover timing gaps. When tax or insurance costs change, the monthly escrow is re-analyzed and adjusted.
Worked example
With $4,800 in annual property taxes and $1,800 in homeowners insurance, the yearly escrow is $6,600, or $550 a month added to your mortgage payment. A two-month cushion means about $1,100 is collected into the escrow account at closing.
Frequently asked questions
What is included in escrow?
Typically property taxes and homeowners insurance, and mortgage insurance (PMI) or flood insurance when applicable. Principal and interest are not escrow — they are the loan repayment itself, though they appear on the same monthly bill.
Why did my escrow payment change?
Property taxes and insurance premiums rise over time. Lenders run an annual escrow analysis and adjust the monthly amount to cover the new totals, and may collect a shortage if the account ran low. That is why your total payment can change even on a fixed-rate loan.
What is the escrow cushion?
A reserve the lender keeps so the account never runs dry between the monthly deposits and the larger tax or insurance bills. Federal law caps it at two months of escrow payments, collected up front at closing.
Related calculators
Educational estimate only — not financial, tax or lending advice. Confirm exact figures with your lender.