Escrow accounts are designed to simplify property tax and insurance payments for homeowners, but they can also become a source of confusion when those costs change. As property taxes and insurance premiums continue to fluctuate across many regions, mortgage servicers are seeing a growing need to help borrowers better understand how escrow accounts affect their monthly payments.
LERETA’s third annual Borrower Escrow Survey offers a closer look at how homeowners understand escrow accounts and how they react when payment adjustments occur. The results show modest improvements in borrower awareness, but they also reveal persistent misconceptions and a growing demand for clearer access to escrow information.
For mortgage servicers, these insights highlight an important opportunity. As escrow-related changes become more common, providing borrowers with clearer information and greater visibility into escrow activity can play a critical role in reducing confusion and strengthening borrower trust.
Borrowers Report Greater Confidence in Escrow Understanding
Nationally, 61% of homeowners say they completely understand how a mortgage escrow account works, compared with 60% the previous year.
However, the results also suggest that some knowledge gaps remain. Nearly 39% of borrowers believe that if they have a fixed-rate mortgage and an escrow account, their total monthly mortgage payment cannot change, a misconception that has increased slightly from the prior year.
In reality, fluctuations in property taxes and insurance premiums can significantly affect a borrower’s total mortgage payment even when the loan itself carries a fixed interest rate.
For servicers, this gap between perceived understanding and actual knowledge highlights the importance of clearly explaining how escrow accounts influence monthly payments and why adjustments may occur.
Property Taxes and Insurance Are the Primary Drivers of Payment Increases
Among borrowers who experienced a mortgage payment increase in the past two years, survey results show the most common drivers were:
- 62% cited higher property taxes contributed to the increase
- 48% cited increased homeowners insurance premiums
- 21% cited rising flood insurance costs
Despite improvements in borrower awareness, these payment increases still catch many homeowners off guard. 60% of those who experienced an increase said they were surprised by the change.
Even when borrowers receive communication about escrow adjustments, they may not fully anticipate how shifts in taxes or insurance premiums translate into their monthly mortgage payment.
Financial sensitivity also plays a role. 40% of borrowers say they would not be able to handle a 25% increase in their monthly mortgage payment, underscoring how significant these changes can feel for many homeowners.
Reducing surprise and improving borrower understanding requires clear, accessible information about how escrow accounts operate and how payment changes occur.
Borrowers Want Greater Visibility Into Escrow Activity
Nearly three-quarters of borrowers (72%) say it would be very helpful to access the amount and status of their property tax bill within their mortgage website or mobile app.
This insight reflects a broader shift in borrower expectations. Homeowners increasingly expect the same level of digital transparency from their mortgage servicer that they experience in other financial services.
Access to escrow information within a mortgage platform can help borrowers:
- Better understand how their mortgage payment is structured
- See when property tax payments are made
- Feel more confident in how their escrow account is being managed
Improving visibility into escrow activity can also reduce confusion and lower borrower inquiry volumes for servicers.
Bringing Escrow Transparency Directly to Borrowers
As borrower expectations for escrow visibility continue to grow, technology is playing an increasingly important role in delivering that transparency.
LERETA’s Homeowner Portal provides borrowers with real-time insight into their property tax payments through a digital experience embedded within the servicer’s existing mortgage platform. This portal allows homeowners to easily view key escrow information alongside their loan details.
Through the portal, borrowers can access:
- Real-time status updates for property tax payments
- Detailed transaction information, including payment dates and tracking data
- A clear, user-friendly view of escrow activity tied to their mortgage account
- Confirmation that property tax payments have been processed accurately and as expected
Providing this level of visibility helps borrowers better understand how their escrow accounts are managed, giving them greater confidence that their property tax payments are being handled correctly, while also reducing the need for manual inquiries.
Turning Escrow Insights Into Better Borrower Experiences
LERETA’s latest escrow survey underscores how quickly borrower expectations are evolving. As taxes and insurance costs continue to influence mortgage payments, borrowers are looking for clearer insight into how their escrow accounts are managed and when key payments are made.
For mortgage servicers, meeting these expectations means making escrow information easier for borrowers to access and understand. Providing that level of visibility can help reduce confusion, strengthen borrower confidence, and support a smoother servicing experience.
To explore how LERETA supports servicers navigating today’s escrow environment, learn more about the Homeowner Portal or connect with the LERETA team to discuss how our solutions support your modern mortgage servicing.
