---
title: "Escrow account (impounds) — What It Means | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/escrow-account/
---

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Mortgage & lending[All terms starting with E](/glossary/#letter-E)

# Escrow account (impounds)

Also called: impound account, escrow impounds, escrow analysis

An account your servicer uses to collect and pay your property taxes and homeowners insurance alongside the mortgage payment.

Rather than paying taxes and insurance in lump sums, you pay one twelfth each month with the mortgage. The servicer holds the money and pays the bills when they come due, then re-analyzes the account periodically and adjusts the monthly figure.

Because taxes and insurance premiums change, the escrow portion of your payment changes too, which is why a payment can rise even on a fixed-rate loan. A shortage after the first year is common when the initial estimate was based on pre-sale figures.

## Why it matters

The escrow account is why “fixed rate” does not mean “fixed payment.” Only principal and interest are fixed.

## Related terms

- [PITIPrincipal, Interest, Taxes and Insurance, the four parts of a typical monthly mortgage payment.](/glossary/piti/)
- [PrepaidsMoney collected at closing to fund your own future taxes and insurance, plus interest from closing to month end.](/glossary/prepaids/)
- [Property taxAn annual tax assessed by local government on real property, usually collected monthly through escrow.](/glossary/property-tax/)
- [Homeowners insuranceProperty and liability coverage a lender requires, typically paid a year in advance at closing then escrowed.](/glossary/homeowners-insurance/)

## Go deeper

- [How the escrow cushion is set](/blog/escrow-cushion-how-it-is-set/)
- [Escrow shortage after year one](/blog/escrow-shortage-after-first-year/)

## More in Mortgage & lending

- [Amortization](/glossary/amortization/)
- [APR (Annual Percentage Rate)](/glossary/apr/)
- [ARM (Adjustable-Rate Mortgage)](/glossary/arm/)
- [Cash-out refinance](/glossary/cash-out-refinance/)
- [Closing costs](/glossary/closing-costs/)
- [Conforming loan](/glossary/conforming-loan/)

## Have a question about your own situation?

Ondo handles brokerage, lending, property management and notary under one roof, so the answer does not change depending on who you ask.

[Talk to Ondo](/contact/)[Browse all terms](/glossary/)

Loan information is provided by Ondo Real Estate (NMLS ID on file). This is not a commitment to lend, a loan approval, or an offer of credit. Rates, terms, and payments shown are estimates for illustration only, are not a quote, and are subject to credit approval, underwriting, and market conditions. You are not required to use Ondo for financing to buy or sell with Ondo. Equal Housing Lender. Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision. [Licensing and disclosures](/licensing/)