It’s an account your lender manages inside your mortgage payment to pay property taxes and insurance for you — which is why payments change even on fixed-rate loans. Review the annual escrow analysis for errors.
That gap between your loan’s principal-and-interest and what you actually pay monthly is escrow: the lender collects a prorated share of your property taxes and homeowners insurance each month, then pays those bills when due. It’s why a "fixed" mortgage payment moves — taxes and premiums change, and each year’s escrow analysis trues up the account, adjusting your payment and flagging any shortage (payable as a lump sum or spread forward) or surplus (refunded above a threshold). Errors happen — wrong tax figures, lapsed or double-paid insurance — so read the analysis rather than filing it. Escrow is often mandatory with smaller down payments; waivers exist with sufficient equity, trading convenience for control.
The escrow portion moved — property taxes or insurance premiums rose, or the analysis found a shortage. Principal and interest stay fixed; escrow floats.
Sometimes — lenders may waive escrow with enough equity, occasionally for a fee. You gain control and float, and take on the discipline of large tax bills yourself.
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