Escrow
Lending & MortgagesA neutral third-party account that holds funds for property taxes and insurance as part of your mortgage payment.
Example
Example: Your mortgage payment is $2,100/month: $1,700 for principal and interest, plus $400 held in escrow. Of that $400, $250 goes toward annual property taxes ($3,000/year) and $150 toward homeowners insurance ($1,800/year). Your lender pays these bills from the escrow account when they come due.