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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 property tax

Annual insurance

Monthly escrow collection

Starting balance (Jan 1)

Tax due month 1 (1-12)

Tax due month 2 (0 = none)

Insurance due month

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.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Impound Account Balance Calculator is built to give a quick, browser-based estimate for impound account balance. 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. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the impound account balance result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this impound account balance estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

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.