Definition of escrow payment

part of the borrower's monthly payment that goes into an account (called escrow, impound, or trust) to pay property taxes and insurance when they are due.

Example: Within a $2,000 payment for principal, interest, taxes, and insurance, $500 is an escrow payment that is deposited with the lender or loan servicer. The money will be used to pay taxes and insurance premiums when the amounts are due.