Project your escrow account, the cushion, any shortage or surplus and the new payment
Updated 2026-10-02
Your new escrow payment is your yearly tax and insurance bills divided by 12, plus any shortage spread over 12 months. The shortage is the gap between the lowest projected balance in the coming year and the cushion your servicer may hold (at most two months of deposits under RESPA). Enter your bills, when they are paid and your starting balance to check your escrow statement. See the full mortgage payment · what escrow is.
Your escrow account
Month 1 is the first payment month of the new escrow year on your statement.
Your escrow analysis
New monthly escrow
$666.67
$550.00 for bills + $116.67 shortage
Shortage
$1,400
lowest balance -$300 in month 10, cushion $1,100
Yearly escrowed bills
$6,600
cushion allowed $1,100
Change from today
+$166.67
a month vs $500.00
Projected escrow balance by month
Month
Deposit
Bills paid
Balance
1
$550.00
—
$1,350
2
$550.00
—
$1,900
3
$550.00
—
$2,450
4
$550.00
$2,400
$600
5
$550.00
—
$1,150
6
$550.00
—
$1,700
7
$550.00
$1,800
$450
8
$550.00
—
$1,000
9
$550.00
—
$1,550
10
$550.00
$2,400
-$300
11
$550.00
—
$250
12
$550.00
—
$800
Estimates for planning, not a loan offer or financial advice. Every rate and cost here is a number you enter or an example you can change; confirm figures with your lender.
This follows the aggregate analysis in Regulation X, 12 CFR 1024.17, the RESPA rule servicers use (checked October 11, 2026). The servicer projects each month of the coming year: your deposit goes in, and each tax or insurance bill comes out in the month it is due. The lowest point of that projection is compared with the cushion, which may not exceed one-sixth of the year's disbursements (two months). A low point below the cushion is a shortage; above it, a surplus. Surpluses of $50 or more must be refunded within 30 days if you are current on payments.
Worked example
Property tax of $4,800 paid in two installments (months 4 and 10) and insurance of $1,800 (month 7) total $6,600 a year, so the deposit is $550.00 and the maximum cushion is $1,100. Starting at $800, the balance dips to -$300 in month 10, when the second tax bill is paid. That is $1,400 below the cushion. Spread over 12 months it adds $116.67, so the new escrow payment is $666.67, up $166.67 from $500.00. Pay the shortage in one lump sum and the payment is $550.00 instead.
Why escrow payments change every year
Tax reassessments. A new assessment, an expired exemption or a new levy raises the tax bill. File a homestead exemption if your county offers one.
Insurance renewals. Premiums move every year. Shopping the policy is the quickest way to cut escrow.
Last year's shortfall. If bills rose mid-year, the account ran low and that gap is collected on top of the higher deposit, so the first year after an increase is the steepest.
Check your escrow statement
Compare the cushion with two months of deposits. More than that, without a state rule allowing it, is worth asking about.
Check the bill amounts against your tax bill and policy declarations page; servicers sometimes estimate.
A surplus of $50 or more should come back as a check within 30 days.
Learn more in the CFPB's escrow account explainer. This is an estimate for planning; your servicer's annual escrow statement is final.
Frequently asked questions
What is an escrow analysis?
Once a year your servicer projects the next 12 months of tax and insurance bills paid from your escrow account, sets the new monthly deposit, and checks whether the account will run short or hold too much. Regulation X (12 CFR 1024.17) sets the rules and requires an annual escrow account statement.
Why did my escrow payment go up?
Usually because property tax or homeowners insurance rose. Two things hit at once: the new monthly deposit covers the higher bills, and any shortage from last year is spread over the next 12 months. In the example, bills of $6,600 need $550.00 a month, and a $1,400 shortage adds $116.67, for $666.67.
How much cushion can my lender keep in escrow?
No more than one-sixth of the estimated annual disbursements, which is two months of escrow payments, unless state law or your mortgage sets a lower amount (12 CFR 1024.17(c)(1)).
How is an escrow shortage calculated?
The servicer runs the account forward month by month: deposit in, bills out. The lowest projected balance is compared with the allowed cushion. If the low point is below the cushion, the difference is the shortage.
Do I have to pay an escrow shortage all at once?
No. If the shortage is less than one month's escrow payment, the servicer may ask you to pay it within 30 days or spread it out. If it is one month's payment or more, the servicer can only collect it in equal payments over at least 12 months (12 CFR 1024.17(f)(3)). You can usually choose to pay it in a lump sum to keep the monthly payment lower.
When do I get an escrow refund?
If the analysis shows a surplus of $50 or more, the servicer must refund it within 30 days, as long as your payments are current (12 CFR 1024.17(f)(2)). In the second example the lowest balance is $2,000 against a $1,000 cushion, a $1,000 surplus to refund.
What is the difference between an escrow shortage and a deficiency?
A shortage means the account is projected to fall below the target balance but stays positive or within reach. A deficiency means the account actually went negative because the servicer advanced money for a bill. Both are repaid under the same Regulation X rules.
Can I drop escrow to avoid the increase?
Removing escrow does not lower your taxes or insurance; you would pay them yourself. Many loans require escrow (FHA and most loans with less than 20% equity), and some lenders charge a fee to waive it.