• 62% have experienced payment increases driven by higher property taxes
  • 40% would not be able to make their monthly payment if it increased by 25%

POMONA, Calif., February 10, 2026 — Findings released today by LERETA, a provider of real estate tax and flood services for mortgage servicers, reveal that while many borrowers report confidence in their understanding of escrow accounts, persistent misconceptions and affordability concerns remain, especially as property taxes and insurance premiums continue to drive monthly payment changes. The survey found that 61% of borrowers say they completely understand how a mortgage escrow account works, indicating perceived familiarity even as misunderstandings persist.

In LERETA’s third annual Borrower Escrow Survey, conducted among 1,037 homeowners, 62% of borrowers who experienced a payment increase said higher property taxes contributed to that change, underscoring how tax and insurance costs can meaningfully impact monthly payments. While some measures point to incremental improvement year over year, this year’s results indicate that borrower confusion around escrow-related payment changes remains largely unresolved.

Key Findings

  • Escrow Understanding Is Steady, But Misconceptions Persist. More than three in five borrowers (61%) say they completely understand how a mortgage escrow account works, up slightly from last year (60%). Confusion remains around how escrow can affect the monthly total payment. The survey found that 39% of borrowers mistakenly believe their total monthly mortgage payment cannot change if they have a fixed rate mortgage and an escrow account, up from 36% last year.
  • Borrowers Recognize Escrow Components, But Not Universally. Nearly all borrowers (93%) believe escrow includes funds to pay property taxes, up from 91% last year. Borrowers are less consistent on insurance, although more than four in five (85%) believe escrow includes funds to pay homeowners and or flood insurance.
  • Payment Increases Are Widespread, And Still Surprising. Even as awareness improves in some areas, payment changes still catch borrowers off guard. Among borrowers who experienced a payment increase, three in five (60%) said they were surprised, up from just over half (53%) last year. Property taxes remain the most frequently cited driver of payment increases, rising from 57% last year to nearly two thirds (62%) this year. Insurance related impacts also increased, with nearly half (48%) citing higher homeowners insurance premiums and about one in five (21%) citing higher flood insurance premiums. More than a quarter (26%) also cited interest rate changes.
  • Communication Is Improving, But Borrowers Still Want Clarity. More than two thirds of borrowers (70%) say their mortgage company has communicated how rising property taxes and or insurance costs could change their monthly payment, up from 56% last year. Separately, more than three quarters (78%) agree their mortgage company communicates clearly about escrow, including 29.9% who completely agree and 48.3% who agree.
  • Affordability Concerns Remain High For Significant Increases. Nearly half of borrowers (47%) said a 10% monthly payment increase would be a hardship, and 15% said they could not handle it. At a 25% increase, two in five (40%) said they could not handle the change.
  • Borrowers Want More Transparent, In-Platform Information. Nearly three quarters of borrowers (72%) said it would be very helpful to access the amount and status of their property tax bill being paid within the mortgage website or mobile app, reinforcing demand for clearer, easier access to escrow related information.

These findings come at a time when borrower frustration with escrow-related changes is intensifying across the mortgage servicing landscape. Recent research highlighted in LERETA’s analysis of borrower sentiment shows that 57% of homeowners experienced an escrow-related payment increase, and satisfaction among those borrowers was 67 points lower than among borrowers who did not see a change. As servicers look for ways to address these challenges, greater visibility into escrow activity, particularly property tax information, is emerging as an important step toward reducing confusion and improving the borrower experience. That visibility is increasingly being delivered through solutions like ICE’s Homeowner Portal, powered by real estate tax data from LERETA.

“Rising property taxes and insurance premiums continue to reshape what homeowners experience month to month, and escrow is often where that impact shows up first,” said Katie Brewer, Chief Executive Officer, LERETA. “This year’s survey reinforces that many borrowers feel confident in their understanding of escrow, yet misconceptions still persist and that gap can lead to real frustration when payments change. LERETA works alongside servicers to bring timely, accurate tax and flood data into their processes so they can communicate changes earlier, explain them more clearly, and help borrowers feel prepared instead of surprised, We’re also partnering with key technology providers, such as ICE, to bring transparency to borrowers through data provided in their Homeowner Portal, functionality that was recently released,” said Brewer.

About LERETA

Since 1986, LERETA has provided the mortgage and insurance industries the fastest, most accurate and complete access to property tax data and flood hazard status information across the U.S. LERETA is committed to giving customers extraordinary service and cost-effective property tax and flood solutions. LERETA’s services are designed to increase efficiency, reduce penalties and liabilities and improve processes for mortgage originators and servicers. LERETA’s dedicated teams of real estate tax and flood professionals along with LERETA’s experienced management team allow the company to lead the industry in service and technology.