If your monthly mortgage payment has crept up over the past few years, there is a good chance your property taxes are to blame. According to Ownwell's 2026 National Homeowner Survey, 9 in 10 homeowners are concerned about the long-term financial impact of rising property taxes, yet 74% have never appealed their tax bill. Of those who have not appealed, 57% did not even know they had the right to do so.
That is a massive missed opportunity. Your property taxes are not a fixed cost you have to accept. They are baked into your mortgage payment every month, and if your county has overassessed your home, you are likely overpaying.
In this article, we will cover:
How property taxes fit into your mortgage payment through escrow
Why your monthly payment can change even with a fixed interest rate
What you can do to lower the tax portion of your payment through appeals and exemptions
What Is PITI and Where Do Property Taxes Fit?
A note before we dive in: If you own your home outright or your lender does not require an escrow account, your county bills your property taxes directly. The full amount is due by your county's property tax bill due date. The rest of this article focuses on homeowners whose taxes are bundled into a mortgage payment through escrow.
PITI stands for Principal, Interest, Taxes, and Insurance. These are the four components that make up your total monthly mortgage payment. Most homeowners know about principal and interest, but many do not realize that property taxes and homeowners insurance are also rolled in.
Here is how it works:
Your mortgage servicer estimates your annual property tax bill, divides it by 12, and adds that amount to your monthly payment. The servicer holds those funds in an escrow account and pays the county on your behalf when the tax bill comes due.
For many homeowners, property taxes are the second-largest component of their monthly payment after principal and interest. That means even a modest increase in your assessed value can have a noticeable impact on what you pay each month.
PITI Breakdown: A Worked Example
Let's look at a real example. Consider a $350,000 home in Texas with a 2.07% effective tax rate:
Annual property tax bill: $350,000 x 2.07% = $7,245
Monthly escrow contribution for taxes: $7,245 / 12 = ~$604
Here is how a typical PITI breakdown might look for this home:
Component | Annual Cost | Monthly Cost |
|---|---|---|
Principal + Interest (30-year fixed at 6.5%, $280,000 loan) | ~$21,240 | ~$1,770 |
Property Taxes | $7,245 | ~$604 |
Homeowners Insurance | ~$2,400 | ~$200 |
Total PITI Payment | ~$30,885 | ~$2,574 |
In this example, property taxes account for nearly a quarter of the total monthly mortgage payment. That $604 per month is not a fixed number, either. It changes whenever your county reassesses your home's value, which is typically annually.
How Much Are You Over Paying?
How Escrow Accounts Handle Your Property Taxes
An escrow account (sometimes called an impound account) is a holding account managed by your mortgage servicer. Each month, a portion of your mortgage payment goes into this account to cover property taxes and homeowners insurance.
When your county's property tax bill comes due, typically once or twice a year, your servicer pays it directly from the escrow balance. You never have to write a separate check to the county.
Once a year, your servicer performs an escrow analysis. This review compares what the servicer collected over the previous year to what was actually owed.
If property taxes increase and the account does not have enough to cover next year's bills, you will have an escrow shortage. Your servicer will increase your monthly payment to cover the difference. On the other hand, if the servicer collected more than necessary, you may receive a surplus refund by check or as a credit applied to future payments.
Why Your Mortgage Payment Can Change Even With a Fixed Rate
This is one of the most common sources of confusion for homeowners. You're locked in a fixed interest rate, so why did your payment just go up by $100 a month?
The answer: A fixed-rate mortgage locks in the interest rate on your loan, but it does not freeze the taxes-and-insurance portion of your payment.
When your county raises your property's assessed value, your tax bill goes up, your escrow payment increases, and your total monthly mortgage payment rises with it.
Property tax reassessments are the most common reason mortgage payments change on a fixed-rate loan. And in states where home values have surged, reassessments can be significant.
How a Reassessment Affects Your Payment
Let's say your Texas home was assessed at $350,000 last year, and the county just raised it to $400,000. At a 2.07% effective tax rate, here is what happens:
Assessed Value | Annual Tax Bill | Monthly Escrow (Taxes Only) | |
|---|---|---|---|
Before Reassessment | $350,000 | $7,245 | ~$604 |
After Reassessment | $400,000 | $8,280 | ~$690 |
Increase | +$50,000 | +$1,035 | +~$86 |
That $86-per-month increase will be reflected in your total mortgage payment at the next escrow analysis.
If your servicer also needs to recover a shortfall from the previous year, the monthly jump can be even steeper, since the catch-up amount is typically spread over 12 months on top of the higher ongoing escrow.
How to Lower Your Property Tax, and Your Mortgage Payment
Here is the part most homeowners miss: The property tax portion of your mortgage is not set in stone. If your county has overassessed your home, you have the right to challenge that assessment and lower your monthly payment.
Most homeowners never take this step. According to Ownwell's Texas Protest vs. Non-Protest Study, homeowners who skipped their protest across 17 Texas counties left $3.3 billion in potential savings on the table over three years. Only 32% protested in 2025, while win rates ranged from 57% to 89%. Among Ownwell customers who do file, 88% receive a reduction.
The chain is direct: lower assessed value, lower tax bill, lower escrow payment, lower monthly mortgage payment.
Filing a Property Tax Appeal
After processing over a million appeals, we have found that the process follows a consistent pattern regardless of where you live. The appeal (called a "protest" in Texas and a "grievance" in New York) starts with reviewing your assessed value and comparing it to recent sales of similar homes.
From there, gather evidence such as comparable sales and errors in your property record, then file before your jurisdiction's deadline. Three to five well-chosen comparable sales make the strongest case. You can appeal your property taxes on your own or work with a professional service.
How to Know Your Appeal Was Successful
After the hearing, you will receive a written decision with the newly determined value. Verify the updated assessment on your county's website, then watch for your next escrow analysis, which is when your mortgage servicer recalculates your monthly payment based on the lower tax bill. If your escrow account has a surplus from overpayment, you may receive a refund.
In our experience, most homeowners see the escrow adjustment within a few months of the county updating the assessed value. When Ownwell handles the process, we notify you as soon as the reduction is confirmed so you know exactly when to expect the change in your mortgage payment.
Exemptions: A Second Lever
Property tax exemptions can also lower your taxable value. The most common is the homestead exemption, available in more than 40 states. Many homeowners qualify but never apply. In Texas, Michigan, Illinois, and New York, you can even file retroactively for missed exemptions going back one to three years.
Example Calculation of an Appeal On Your Mortgage Payment
Suppose your Texas home was assessed at $400,000 and you successfully appeal the value down to $350,000. At a 2.07% effective tax rate:
Before Appeal | After Appeal | Savings | |
|---|---|---|---|
Assessed Value | $400,000 | $350,000 | -$50,000 |
Annual Tax Bill | $8,280 | $7,245 | $1,035/year |
Monthly Escrow (Taxes) | ~$690 | ~$604 | ~$86/month |
That is $1,035 back in your pocket every year, or about $86 less on your monthly mortgage payment. Those savings compound if you appeal annually and the lower value carries forward.
Your Neighbors Might Be Paying Less...
How Ownwell Can Help
If the idea of researching comparable sales, gathering evidence, and attending hearings sounds overwhelming, that is where we come in. Ownwell handles the entire property tax appeal process on your behalf, from filing to negotiation to resolution.
Here is what sets our service apart:
No upfront cost: You only pay if we save you money. If your appeal does not result in a reduction, you owe nothing. See our pricing for details.
Real savings: Our customers save an average of $774 per year on their property taxes, money that flows directly into a lower monthly mortgage payment.
Trusted by homeowners: We have a 4.7-star rating across 3,000+ Google reviews and have processed over 1 million appeals nationwide.
We currently operate in Texas, California, Florida, Georgia, Illinois, New York, Washington, Pennsylvania, and Colorado, with more states on the way. You can check property tax trends in Texas or browse trends for your state to see what homeowners in your area are paying.
The process takes just a few minutes to get started. Enter your address, and we will tell you if you are likely overpaying.
Frequently Asked Questions
Do I Still Have to Pay Property Taxes After My Mortgage Is Paid Off?
Yes. Property taxes are owed to your county regardless of whether you have a mortgage. Once your loan is paid off, the escrow account closes, and you become responsible for paying the county directly. Your county will mail you a tax bill, and you will need to pay it by the due date to avoid penalties and interest.
Can I Opt Out of Escrow and Pay Property Taxes Myself?
Some lenders allow an escrow waiver, but they typically require strong credit, a low loan-to-value ratio, and sufficient equity in your home. If you opt out, you are responsible for paying your property taxes and insurance directly and on time. Missing a payment can result in penalties, interest, or even a tax lien on your property.
Are Property Taxes Tax-Deductible?
Yes, property taxes are deductible on your federal return if you itemize. They fall under the state and local tax (SALT) deduction, which was capped at $10,000 under the 2017 tax law.
Beginning in 2025, the cap was raised to $40,000 ($20,000 for married filing separately) through 2029, after which it is scheduled to revert to $10,000. The cap covers property taxes and combined state income or sales taxes.
How Often Do Property Tax Assessments Change?
The frequency of reassessments varies by state. Some states, like Texas, reassess property values every year. Others operate on two-year, four-year, or even longer cycles.
In general, rising home values in your area often trigger higher assessments, even in states with less frequent reassessment schedules. Check your state's property tax trends on Ownwell's trends pages to see how assessments are changing where you live.
