Zoho Sheet

Impound / Escrow Waiver Fee Break-Even

This spreadsheet helps you decide whether to use an impound / escrow account

for a mortgage when there is an escrow waiver fee. For more information, see

Assumptions

Loan amount

200,000

Impound/Escrow Waiver Fee

0.125%

of loan amount

Property tax (annual)

$3,000

Homeowner's insurance (annual)

$600

Number of months as cushion

months

Interest rate in impound / escrow account

0.0%

Interest rate in your own account

2.5%

Marginal tax rate (federal + state)

25.0%

Calculations

Fee for waiving impound/escrow

$250

Average balance in impound/escrow account

$3,000

Lost interest, before tax

$75

Lost interest, after tax

$56

Years to break even

4.4

years

Sheet1