If you have a fixed-rate loan and your payment went up, the cause is almost always escrow. Escrow is the part of your payment that pays property taxes and homeowners insurance. When taxes or insurance go up, your servicer's yearly escrow review raises your payment. If the account came up short, federal rules say that for a shortage of one month's escrow payment or more, the servicer can only ask you to repay it over at least 12 months, though you may choose to pay it sooner. The servicer may also keep a cushion of up to one-sixth of a year's escrow bills.
Many new owners in Nashville see their payment jump after the first year. Often the escrow was set up using the old tax bill, and the new bill is higher. In Davidson County, a reappraisal can also change your home's value for tax purposes.
| Rule | What it means for you |
|---|---|
| Yearly review | Your servicer must review the escrow account and send a yearly statement within 30 days of the end of the escrow year |
| Cushion | The servicer may hold extra, up to 1/6 of the year's escrow bills (about two months) |
| Shortage of 1 month's escrow or more | The servicer may do nothing, or spread it over at least 12 equal monthly payments |
| Shortage under 1 month's escrow | The servicer may do nothing, ask for it within 30 days, or spread it over at least 12 months |
| Surplus of $50 or more | Generally refunded to you within 30 days of the review |
Simple math to show why the payment can jump twice. It is not your actual bill.
| Amount | |
|---|---|
| Property tax goes up by | $1,200 a year |
| New tax cost added each month | +$100 |
| Last year's shortage of $1,200, spread over 12 months | +$100 (for one year) |
| Total increase for the next year | about $200 a month, then about $100 after the shortage is paid |
The Davidson County Assessor mailed new 2025 reappraisal values on April 18, 2025. The state certifies a tax rate after a reappraisal so the county does not get a windfall from existing homes. Your own bill can still go up if your home's value rose more than average or if Metro changes the tax rate. If you think your value is wrong, the Assessor's office explains how to request a review or appeal by the posted deadlines.
Your interest rate did not change. Your escrow did, because your property taxes or homeowners insurance went up.
It means the escrow account did not collect enough last year to pay the bills. Your servicer finds it in the yearly review.
No. If the shortage is one month's escrow or more, federal rules let the servicer only spread it over at least 12 months. You can choose to pay it early.
Yes, a cushion of up to one-sixth of the year's escrow bills, which is about two months.
The escrow may have used the old tax bill. A reappraisal or a rate change can also raise your bill.
Yes. The Assessor's office explains how to request a review and appeal. Watch the deadlines each year.
Confused by an escrow letter, or buying and want a better tax estimate up front? Call me at (615) 495-6594, email travis@heathrowmtg.com, or start an application.
Checked October 11, 2026. The example is simple math for illustration. Appeal deadlines change each year; check the Assessor's site.
