The 2026 Borrower Escrow Survey

In 2026, 60% of borrowers whose mortgage payment went up were surprised by the change, even as more homeowners say they understand how escrow works.

Source: LERETA 2026 Borrower Escrow Survey · n=1,037 homeowners

Executive Summary

Homeowners feel more confident about escrow than they did a year ago. Fewer of them are prepared for what it does to their monthly payment.

In our third annual Borrower Escrow Survey, 61% of homeowners said they completely understand how a mortgage escrow account works, a slight rise from 60% the year before. Nearly two in five borrowers still believe a fixed-rate mortgage means a fixed payment, and among borrowers who saw their payment rise, 60% were surprised, up from 55% in 2025.

Property taxes were the most common driver, cited by 62% of borrowers with an increase, followed by homeowners insurance at 48% and flood insurance at 21%. For many households, the stakes are immediate: 47% said a 10% payment increase would be a hardship, and 40% said they could not handle a 25% increase at all.

Seventy percent of borrowers said their mortgage company had explained how rising taxes or insurance could change their payment, up from 56% a year ago. Seventy-eight percent said their servicer communicates clearly about escrow, and 72% said it would be very helpful to see their property tax status inside their mortgage website or app.

01

Methodology

The 2026 Borrower Escrow Survey is LERETA's third annual study of homeowner understanding of mortgage escrow accounts and the impact of rising property taxes and insurance premiums on monthly mortgage payments. The survey was conducted in December 2025 among 1,037 U.S. homeowners who had purchased or refinanced their home between 2021 and 2025, all of whom carry an escrow account. Findings were released February 10, 2026.

Respondent profile: Ages ranged from 25 to 60+, with the largest concentration in the 40–49 bracket (36%). The sample was 54% male and 46% female. All respondents reported household income of $60,000 or more, and 72% hold at least a four-year degree.

A note on year-over-year comparability: Prior editions used different population parameters, and some question wording was revised between editions. Both factors are noted where they affect direct comparability.

02

Key Findings

Almost Everyone Knows Taxes. Not Everyone Knows Insurance.

Source: LERETA 2026 Borrower Escrow Survey

Almost every borrower knows escrow pays their property taxes. Insurance is less certain: 85% connect escrow to homeowners or flood insurance.

Confidence Holds Steady, but a Core Misconception Is Growing

39%still believe a fixed-rate mortgage means a fixed monthly payment.

Borrowers understand the concept in the abstract; many do not apply it to their own situation. That gap is where the surprise lives.

Payment Increases Are Widespread

Among borrowers who saw a payment increase, 62% pointed to higher property taxes, 48% to homeowners insurance, and 21% to flood insurance.

For Many Households, a Larger Increase Would Break the Budget

40%could not handle a 25% payment increase.

Communication Is Improving

Proactive communication jumped 14 points in a year, and 78% of borrowers now say their mortgage company communicates clearly about escrow.

Borrowers Want Escrow Visibility

72%want to see their property tax status on their mortgage website or app.

03

Year-over-Year Trends

The value of this study builds with every edition. Three surveys in, the numbers on several key measures are moving in a consistent direction.

Three-Year Track

Two-Year Track

04

What This Means for Servicers

For VPs of Lending and growth leaders. Escrow experience is a retention lever. The servicer who handles escrow changes with clarity holds the relationship.

For operations and loan servicing managers. The fix is timing: reach borrowers before the analysis posts, name the driver, and give the number.

For COOs and CFOs. Escrow confusion carries real cost: complaint handling, staff time, delinquency risk, and churn.

About the Research

LERETA has provided real estate tax and flood data to the mortgage industry since 1986. The annual Borrower Escrow Survey provides a current view of what borrowers understand and where confusion remains.

Related Resources