Franklin, Tenn. — October 5, 2026

A fixed-rate mortgage locks in the interest rate, but it does not lock in the monthly payment. For the roughly 80% of mortgage holders who pay property taxes and homeowners insurance through an escrow account, as CNBC has reported, those costs flow directly into the payment, and both have climbed in recent years.

An escrow account is maintained by the loan servicer, which collects a portion of each year's projected tax and insurance bills with every monthly payment and pays those bills when they come due. Under the federal Real Estate Settlement Procedures Act, carried out through the Consumer Financial Protection Bureau's Regulation X, servicers must analyze each escrow account at least once a year and may hold a cushion of no more than one-sixth of estimated annual disbursements, about two months of payments. When the analysis finds that the account will come up short, the servicer generally spreads the shortage over the next 12 months or lets the borrower pay it in a lump sum.

Shortages have become common. Property data firm Cotality projected that about 65% of escrow accounts would show a shortage this year, averaging $2,157, CNBC and USA Today reported. Spread over 12 months, that average works out to roughly $180 more per month. Cotality estimated that escrow costs have risen about 45% since 2019.

Insurance has been a major driver. ICE's September 2026 Mortgage Monitor found that the average single-family mortgage holder now pays a record $209 a month for property insurance, nearly 80% more than at the start of 2020, and that insurance accounts for 9.6% of the average monthly mortgage payment. Annual premium growth has eased to 8.7%, down from a peak of 15.1% at the end of 2024, and ICE said rising coverage limits, not repricing, explained about two-thirds of the past year's increase.

The same data show that shopping for coverage has paid off. Homeowners who switched between private carriers over the past year cut their insurance payments by a record 6.6% on average, while those who stayed with their existing insurer saw premiums rise 10.4%, according to ICE. Switchers saved about $440 a year compared with those who stayed and also ended up with lower deductibles and higher coverage limits.

Homeowners reviewing an annual escrow statement can compare the projected tax and insurance amounts against their actual bills, confirm that any new policy was reported to the servicer, and check whether a property tax assessment can be appealed. Borrowers who change insurers in the middle of the year should make sure the servicer has the new declarations page so the account is not charged for both policies.

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