How it works
Your servicer estimates the year's property taxes and homeowners insurance, divides by twelve, and collects that amount alongside principal and interest. When the bills come due, the servicer pays them.
Once a year the account is analyzed. If the bills came in higher than estimated, you get a shortage and a new monthly figure. If lower, you get a refund.
Why fixed rate payments still move
A fixed rate fixes principal and interest only. Taxes and insurance are outside the lender's control, and in Pennsylvania a county reassessment or a school district increase can change the escrow portion meaningfully.
Budget for a modest annual increase rather than being surprised by one. Reading the escrow analysis when it arrives takes five minutes and prevents most confusion.