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Mortgage, loan, investing, tax, and money calculators.
Impound Account Balance Calculator
Mortgage escrow (impound) accounts collect 1/12 of annual tax + insurance monthly, then disburse in lump sums when bills come due. The account swings from a peak (just before tax bill) to a low (just after). Federal RESPA rules allow lenders to keep up to 2 months cushion at the annual low point. This calculator models month-by-month balance so you can see cash flow.
Annual low balance
$1,600
Cushion at low point (months)
2.13
Peak balance
$5,225
Monthly required (no cushion)
$750
Monthly over-collection (cushion build)
$25
Jan 31 balance
$2,875
Apr 30 balance
$1,600
Jul 31 balance
$2,125
Dec 31 balance
$2,400
How the math works
With $7,200 tax (split April + Dec) and $1,800 insurance (July), annual $9,000 ÷ 12 = $750/mo required. Collecting $775 builds a $300/year cushion. Low point typically hits right after tax/insurance disbursements.
RESPA: cushion can't exceed 2 months of payment ($1,500 here). If your lender is keeping more — request an escrow analysis, refund of excess, or reduced monthly collection. Your money; don't leave it sitting earning zero.
How to Use
- Enter annual property tax (and due dates) and annual insurance (and due date).
- Enter monthly escrow collection and the starting impound balance at Jan 1.
- See the month-by-month balance, the annual low point, and whether your cushion is legal (< 2 months).
Frequently Asked Questions
Why does lender collect 1/12 when bills aren't monthly?
So there's always money on hand to pay disbursements. If your tax bill is due December 1 and the lender only started collecting in November, there'd be no money. RESPA-compliant 1/12 monthly collection plus a 2-month cushion ensures enough cash at every disbursement.
What's a normal cushion?
1-2 months of escrow payment. RESPA maximum is 2 months (1/6 of annual disbursements). Some lenders run 0-1 month cushion; most run full 2 months. Larger cushion = more of your money tied up in the lender's account earning zero for you.
Can the balance go negative?
Yes — that's an escrow shortage. Lender has to advance funds from their own capital (most lenders do, without fees) and recoup via shortage repayment. Persistent negatives indicate mis-sized monthly collection; trigger an escrow analysis to fix.
Is there interest on my escrow?
Most lenders pay 0%. Some states (CT, CA partially, NY for some loans) require lenders to pay interest on escrow balances (usually 2%). Check your state — if you're due interest and haven't been paid, request it in writing with account statement.
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