Escrow Calculator

Calculate your monthly mortgage escrow payment for property taxes and homeowners insurance. Includes initial escrow deposit at closing, RESPA cushion limits, and annual escrow analysis.

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Monthly Escrow Contribution
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Annual Escrow Disbursements —
Initial Escrow Deposit at Closing (est.) —
Extended More scenarios, charts & detailed breakdown ▾
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Monthly Escrow Payment
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Tax Portion / Insurance Portion —
RESPA Maximum Cushion (2 months) —
Total Annual Escrow —
Professional Full parameters & maximum detail ▾
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Monthly & Annual Escrow

Monthly Escrow Contribution —
Annual Escrow Disbursements —

Closing Day Escrow

Initial Escrow Deposit at Closing —

RESPA Requirements

RESPA Max Cushion (1/6 annual) —
Escrow Required? —
RESPA Compliance Note —

How to Use This Calculator

  1. Enter your annual property tax and annual homeowners insurance.
  2. Add annual PMI or MIP if applicable.
  3. See your monthly escrow and initial closing deposit instantly.
  4. Use Initial Deposit at Closing tab to estimate prepaid items based on closing month and tax due date.
  5. Use Annual Escrow Analysis tab to check if your escrow will have a shortage or surplus after a tax or insurance increase.

Formula

Monthly Escrow = (Annual Tax + Annual Insurance + Annual PMI/MIP) ÷ 12

RESPA Max Cushion = Annual Disbursements ÷ 6 (= 2 months)

Initial Deposit ≈ Monthly Escrow × 2 + Prorated Tax

Example

Annual tax $4,800, annual insurance $1,200, no PMI. Monthly escrow: ($4,800 + $1,200) ÷ 12 = $500/month. RESPA max cushion: $6,000 ÷ 6 = $1,000. Initial deposit: approximately $1,000–$2,400 depending on closing month.

Frequently Asked Questions

  • A mortgage escrow account holds funds for property taxes, homeowners insurance, and (if applicable) PMI or FHA MIP. Your lender collects 1/12 of these annual amounts each month with your mortgage payment, then pays the bills on your behalf when they are due.
  • At closing, you typically prepay 2 months of escrow as a cushion plus any property tax amounts due before your first payment is collected. The exact amount depends on your closing month and when property taxes are due. The total is itemized on your Closing Disclosure.
  • The Real Estate Settlement Procedures Act (RESPA) limits how much lenders can keep in your escrow account. The maximum cushion is 1/6 of annual disbursements (about 2 months of payments). Any surplus over $50 must be refunded to you within 30 days after the annual analysis.
  • On conventional loans, lenders may waive the escrow requirement if your loan-to-value ratio is 80% or lower (20%+ down payment). Lenders often charge an escrow waiver fee (0.125%-0.25% of the loan) or require a slightly higher interest rate.
  • If your lender's annual escrow analysis finds a shortage (because taxes or insurance rose), you can either pay the shortage as a lump sum or have it spread over 12 months as an adjustment to your monthly payment. This is why mortgage payments can change year to year even with a fixed interest rate.

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Sources & References (5) ▾
  1. HUD RESPA Guide — Real Estate Settlement Procedures Act — U.S. Department of Housing and Urban Development
  2. CFPB — Escrow Account Explainer — Consumer Financial Protection Bureau
  3. Fannie Mae Servicing Guide — Escrow Administration — Fannie Mae
  4. MBA — Mortgage Servicing and Escrow Practices — Mortgage Bankers Association
  5. Investopedia — Escrow Account Definition and Mechanics — Investopedia