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How Do I Know If My Property Taxes Are Included In My Mortgage

Purchasing a home is an exciting milestone,but it also comes with financial responsibilities.One of these responsibilities is paying property taxes.Many homeowners wonder if their property taxes are included in their mortgage payments.We will explore the relationship between property taxes and mortgage payments,and provide you with insights to help you understand if your property taxes are indeed included in your mortgage.

What are Property Taxes?

Property taxes are taxes imposed by local governments on the value of real estate properties.These taxes fund various public services,such as schools,parks,road maintenance,and emergency services.The amount of property tax you owe is typically determined based on the assessed value of your property and the tax rate set by your local government.

Components of a Mortgage Payment

To understand if your property taxes are included in your mortgage payment,it's essential to know the components of a typical mortgage payment.A mortgage payment typically consists of four components:principal,interest,property taxes,and insurance(commonly referred to as PITI).The principal and interest payments go towards repaying the loan amount and the interest charged by the lender.The property taxes and insurance payments are additional costs associated with homeownership.

Escrow Accounts and Property Taxes

In many cases,homeowners choose to have their property taxes included in their mortgage payments through an escrow account.An escrow account is a separate account held by the lender to collect and distribute funds for property taxes and insurance premiums.Each month,a portion of your mortgage payment is set aside in the escrow account to cover these expenses when they become due.

How to Determine if Your Property Taxes are Included

To know if your property taxes are included in your mortgage payment,you should review your loan documents and mortgage statements.Look for specific terms like"escrow,""impound,"or"reserve"that indicate the presence of an escrow account.Additionally,check your mortgage statement for a breakdown of your monthly payment,which should include a portion allocated for property taxes and insurance.

Benefits and Considerations of Including Property Taxes in Your Mortgage

Including property taxes in your mortgage payment has several benefits.First,it helps ensure that you set aside funds consistently throughout the year to cover your tax obligations.Second,it provides convenience by eliminating the need to make separate tax payments.However,it's important to consider that including property taxes in your mortgage payment may result in a higher monthly payment.Additionally,the lender may require an initial deposit to establish the escrow account.

What to Do If Your Property Taxes are Not Included

If your property taxes are not included in your mortgage payment,you will need to pay them separately.Contact your local tax authority to determine the amount and due dates of your property tax payments.It's crucial to budget and set aside funds accordingly to avoid any financial strain when the tax bills become due.

Monitoring and Reviewing Your Escrow Account

For homeowners with an escrow account,it's important to regularly monitor and review the account.Keep track of your mortgage statements and annual escrow account analyses provided by your lender.This will help ensure that the correct amount is being collected and disbursed for property taxes and insurance.


Understanding whether your property taxes are included in your mortgage payment is essential for effective financial planning as a homeowner.By reviewing your loan documents,mortgage statements,and contacting your lender,you can determine if your property taxes are included or if you need to make separate payments.Remember to stay informed about any changes to your tax obligations and regularly review your escrow account to ensure smooth management of your property taxes.