Let's take a deeper dive. There are a lot of moving parts to this question. Let's assume the following:

• We have a 30-year fixed home loan for $200,000, with an interest rate of 5.75%. (This breaks down into principal and interest payments of $957.00 a month.)

• The property is valued at $250,000, and the county property tax is .580%. The yearly property taxes are $1,450 (or $120.83 a month)

• Annual home insurance premium is $ 1,500 (or $125 a month)

Your monthly payment would be:

• Principal and interest payments will be $957 a month.

• Escrow payment (property taxes + home insurance) will be $245.83.

• Your monthly loan payment total is $1,202.83.

We can consider the following:

• Principal and Interest payments will not change. 30-year fixed home loan for $200,000, with an interest rate of 5.75% ($957.00 a month)

• The property value increased to $375,000 because of the 50% increase. The county property taxes are .580%, which means the new yearly property taxes are now $2,175 ($181.25 a month)

• Since your property value has increased, it is safe to assume your annual home insurance premium may also increase. The yearly premium increased to $2,164 ($180.33 a month)

Your new monthly payment will now be: 

• Principal and interest payments will remain at $957 a month. 

• Escrow payment (property taxes + home insurance) will increase to $361.58. 

• Your monthly loan payment total is $1,318.58.

While your principal and interest payment did not increase, the escrow portion of your loan payment increased by $115.75 due to the increased property taxes and home insurance premiums.

Now, let's clarify what a mortgage escrow account is:

A mortgage escrow account holds and pays your property taxes, home insurance, and flood insurance. Electing to escrow taxes and insurance, you will make regular contributions to the escrow account through your monthly mortgage loan payment. San Luis Valley Federal Bank will manage the tax and insurance payments when they come due. The escrow account simplifies your budgeting and helps cover these essential expenses.

San Luis Valley Federal Bank performs a yearly review called escrow analysis to examine the funds held in the escrow account. The review will ensure enough money is collected over the year to cover your property taxes, home insurance, and flood insurance payments. If there's a shortage, additional payments may be required to make up the difference to keep the escrow account balanced. Conversely, if there's an overage, we may send out the excess amount or adjust your monthly payment accordingly.

Escrow analysis is completed each year in May. During this time, an escrow analysis letter will be sent out revealing your mortgage's escrow account standing. 

*The example above is a demonstration only. Your loan payment amounts will vary depending on many factors, such as your mortgage loan terms, local county property taxes, and insurance premiums.