Work out what your lender should collect each month for property taxes and homeowners insurance. Enter your bills, when they are due and your escrow balance to see the cushion, the projected low point and whether you face a shortage or a surplus, the way an annual escrow analysis does it.
Last updated:
Escrowed bills
$
Further installments follow evenly
$
$
Flood insurance, special assessment
$
PMI/MIP, if collected with escrow
Escrow account
First payment month of the new analysis
$
Projected balance before the first new deposit
$
Optional, to see the change
$
Optional, for the total payment
Enter your values to see the result.
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How to use the Mortgage Escrow Calculator
Enter your yearly property tax, how often it is paid and the first due month.
Enter homeowners insurance and its renewal month, plus any other escrowed bill or monthly mortgage insurance.
Choose when the escrow year starts and enter the expected escrow balance at that point.
Pick the cushion your servicer holds (2 months is the legal maximum).
Press Calculate escrow to see the new monthly escrow payment, any shortage or surplus and the month-by-month projection.
How escrow analysis works
Add up the year's bills: property tax + homeowners insurance + other escrowed items.
Base payment = yearly bills ÷ 12.
Cushion = up to 2 months of base payments (1/6 of the yearly bills).
Project the balance month by month: add each deposit, subtract each bill on its due month, and find the lowest point.
Compare the low point with the cushion: below it is a shortage, above it is a surplus.
New payment = base payment + shortage ÷ 12 (or minus a small surplus).
Example: tax of $4,800 paid in April and October and insurance of $1,800 due in September make $6,600 a year, a base payment of $550 and a maximum cushion of $1,100. Starting the year with $1,500, the balance falls to $400 after the October tax bill. That is $700 under the cushion, so the shortage adds $58.33 a month and the new escrow payment is $608.33 (or $550 if you pay the $700 at once).
Shortage, deficiency and surplus
Result
What it means
How it is usually handled
Shortage
Projected low point is below the cushion
Spread over 12 months or paid as a lump sum
Deficiency
The account is actually negative because the servicer advanced money
Repaid in 2 to 12 monthly installments or a lump sum
Surplus under $50
Low point is slightly above the cushion
Refunded or credited toward next year
Surplus of $50 or more
Low point is well above the cushion
Refunded within 30 days if the loan is current
To model a deficiency, enter the negative escrow balance as the starting balance.
Tips to avoid escrow surprises
When you get a property tax reassessment notice, expect your escrow payment to change at the next analysis and set money aside for the difference.
Shopping for homeowners insurance can lower escrow, but send the new policy to your servicer so it pays the right insurer.
Paying a shortage in a lump sum keeps the monthly payment lower for the year.
New homeowners often see a shortage after the first year because taxes are reassessed on the purchase price.
Frequently asked questions
How is a monthly escrow payment calculated?
The servicer adds up the property tax, homeowners insurance and any other bills it pays for you over the next 12 months and divides by 12. If the projected balance would dip below the allowed cushion, a shortage amount is added, usually spread over 12 months.
What is an escrow cushion?
It is a reserve the servicer may keep in the account to cover increases. Under RESPA rules (Regulation X), the cushion can be no more than one-sixth of the yearly escrow disbursements, which equals two months of escrow payments. Mortgage insurance is excluded from the cushion.
Why do I have an escrow shortage?
A shortage happens when the account is projected to fall below the cushion, most often because property taxes or insurance premiums went up after last year's analysis, or a tax bill was paid earlier or was higher than estimated. A tax reassessment or new insurance policy are common causes.
Can I pay an escrow shortage in one lump sum?
Usually yes. If the shortage is at least one month's escrow payment, the servicer must let you spread it over at least 12 months, but you can choose to pay it all at once, which keeps your monthly payment at the base amount. Smaller shortages may be billed within 30 days or spread out.
What happens to an escrow surplus?
If the annual analysis shows a surplus of $50 or more and your loan is current, the servicer must refund it within 30 days. A surplus under $50 can be refunded or credited against next year's payments.
How often is escrow analyzed?
Servicers must run an escrow analysis at least once a year and send you a statement showing the past year's activity and the coming year's projection. They may also re-analyze when a tax bill or premium changes significantly.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.