Escrow Account Frequently Asked Questions

Let us help answer your questions about escrow accounts.

Escrow Accounts

An escrow account is an account created for the borrower that is used to pay any property taxes, homeowner’s insurance and/or flood insurance (if applicable). As each mortgage payment is made, a dedicated portion is added to the escrow account to pay taxes and/or insurance.

Escrow accounts are a great way to help budget for tax and insurance payments required for your home. M&T does the work for you by tracking all of the required payments – ensuring your tax and insurance payments are made on time. This service saves the cost of postage and, most importantly, your time.

Certain government agency loans require the establishment of an escrow account. If this is true for your loan, your loan documents signed at loan origination will indicate this requirement.   

If an escrow account was established as a condition of your mortgage, or later added to pay past due taxes/insurance on your behalf, removal of escrow would not be permitted.

M&T is here to help set up an escrow account for you. Simply email us at or call us at 1-800-724-2224.

Your monthly billing statement reflects all escrow activity. This allows you to monitor all activity on your account. Log in to M&T Online Banking to see what bills are being paid from your escrow account and all other online activity.

If the account is interest bearing, that activity would be reflected on your Monthly Billing Statements and Year End statement. 

An escrow reserve, also known as a cushion, is the amount of money collected in the escrow to cover any unanticipated increases in your real estate or insurance premium payment. It acts like a buffer and helps to prevent your escrow account from being overdrawn. All escrow accounts have a reserve unless otherwise indicated by your mortgage documents or state law.


Escrow Payments

Your new escrow payment is comprised of two components:

  • The first is your anticipated tax and insurance expenses for the coming year. Your total anticipated tax and insurance expenses can be found on the top of page 3 of your annual escrow account statement.
  • The second relates to maintaining a minimum required escrow account balance (reserve), which is determined by the Real Estate Settlement Procedures Act (RESPA), your mortgage contract or state law. The difference between your lowest projected balance in the coming year and your minimum required balance is your “shortage amount.” This appears on the bottom of page 3 of your annual escrow account statement.

These values are added together and divided by the number of scheduled payments for the coming year (usually 12) to arrive at your new escrow payment.

  • Property Taxes
  • Homeowner’s Insurance
  • Additional Insurances (flood, wind if applicable)
  • Any other property bills sent to M&T (evaluated on an individual basis)

Log in to M&T Online Banking to view your most recent tax and insurance amounts. You can also find this information on your monthly billing statement under escrow activity.

Payments from your escrow account are determined on a yearly basis. Changes in taxes/insurance may not be accounted for until it is time for the next escrow analysis. If you have documentation that shows a change in your taxes or insurance, please email it to

The funds paid at the end of closing were collected for taxes and insurance premiums currently due. The escrow account funds are meant to pay for all future tax and insurance premiums as they are due.

If you have enrolled in M&T automated payments, you do not need to take further action. Your payment will adjust to the new amounts. If you have set up your payments with a third-party bill pay service or are transferring funds periodically from your M&T checking/savings account, you’ll need to adjust your payments to reflect the new payment amount. 

M&T receives the tax information directly from your municipality. Unless requested, you do not need to send them in. Tax bills are typically paid two to three weeks prior to the due date. If you want a supplemental, interim, or added assessment tax bill paid by us, you will need to forward it to

M&T receives insurance information directly from your carrier. However, if you change insurance carriers please go to MyCoverageInfo to update your insurance information.

Yearly Escrow Review

By comparing the “Projected” to “Actual” disbursement columns in the table on page 2 of your annual escrow account statement, you can observe which disbursements (taxes or insurance) were greater than projected. 

These payments may have increased for several reasons. Some of the most common reasons are:

Tax Related

  • An increase in your property tax rate (per thousand of assessed value)
  • An increase in your property’s assessed value
  • Changes in your tax due date. If your tax due date was moved forward, an escrow shortage will occur as not enough funds would have been collected when the bill came due

Insurance Related

  • Increase in your insurance premiums
  • Change in your insurance carrier. Typically the previous insurance carrier will refund the “unearned” premiums they collected. If these are not deposited into your escrow account a shortage will occur
  • Changes in your insurance coverage. Did you increase coverage levels or reduce your deductibles?


  • Fewer deposits into your escrow account than expected. Have any “less-than-full” mortgage payments been made?

TIP:  Municipalities offer a few common tax exemptions for disability, homestead, senior and veteran status. Check with your local tax office to see if you are eligible for these, or any other exemptions.

Mortgage lenders are required by regulations to perform an annual review of your account and provide a hard copy statement for your records.

A shortage may occur if the taxes or insurance premiums were higher than initially estimated or due to an estimated increase expected in the coming months.

You have two options:

  1. Online: Log in to M&T Online or Mobile Banking, select your mortgage account and click the “Pay Now” button.

    Your mortgage loan must be current to use this option.

  2. By Mail: Send a check made payable to M&T Bank and indicate on the memo line that you are making an escrow shortage payment.

    Please mail the check to:

    M&T Bank
    Escrow Department
    P.O. Box 64787
    Baltimore, MD 21264-4787.

    If you are paying your escrow shortage, the funds will be applied immediately, however your mortgage statement may not reflect changes until the analysis effective date. 

If you decide not to pay the entire shortage payment in one lump sum, you can choose to pay the new monthly payment amount over the next 12 months. The escrow analysis calculation will automatically spread the shortage amount out over the next 12 months.

An overage occurs if the current funds and payments in your escrow account are estimated to exceed the minimal payment amount for the escrow analysis 12-month period. An overage may occur if taxes or insurance premiums were lower than estimated or an estimated decrease is expected in the coming months. This overage amount may be sent out to you as a refund check when the escrow analysis is completed. If the surplus is less than $50.00 dollars it will be credited to your payment.



The M&T servicing team is happy to assist you.

Contact us if you have questions about your existing M&T mortgage.