A lender-held account that pays your property tax and insurance.
An escrow account is money your mortgage servicer holds on your behalf to pay property taxes and homeowners insurance when they fall due.
Your monthly mortgage bill is usually principal, interest, taxes and insurance together — PITI. Only the principal and interest part is fixed by your rate; the escrow part moves whenever your tax assessment or insurance premium changes.
That is why a fixed-rate mortgage payment can still rise year to year.
At 6.76%, principal and interest on a $400,000 loan run about $2,597. Add typical tax and insurance escrow and the real bill is commonly several hundred dollars higher.
See the 30-yr mortgage page