Escrow Meaning: Here’s What It Means and How To Use It

Learn what escrow means, the word’s origin, how to use it, synonyms, antonyms, and more with this handy guide from The Word Counter!

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When you’re a first-time homebuyer, there’s a lot of new information to take in as you travel through this milestone—like new words, new acronyms, and new jargon that might leave you feeling lost. 

One word you may hear a lot when you’re buying a home is escrow. Unless you’ve done your homework, you may not fully understand what escrow means.

What Does Escrow Mean?

Escrow, like many words, has more than one definition. It can be a verb or a noun.

As a noun, an escrow is defined as a bond, a deed, a piece of property, or money that is held by an independent third party in a trust to be relinquished to the grantee when a certain condition has been fulfilled.

Additionally, as a noun, an escrow can be a deposit or fund that is designed to serve in the capacity of an escrow.

Here are some examples of escrow as a noun:

  • Throughout the mortgage term, the agent will hold funds in escrow for property tax payments and homeowners insurance. 
  • Many mortgages require an escrow for property taxes and insurance premiums.

As a verb, escrow is defined as the act of placing something in escrow. Escrow is a transitive verb.

Here are some examples of escrow as a verb:

  • The monthly mortgage payment has a portion deposited into an account since the insurance premiums and property taxes were escrowed.
  • Escrowing makes the process easier for the mortgage lender and the buyer. 

What Is the Origin of Escrow?

The word escrow originates from the Old French word escroue. Escroue meant a scrap of paper or a scroll of parchment. This scrap would have been used as the deed that a third party would hold onto until a transaction was completed. 

Today, escrow still essentially represents a piece of paper like a deed, money, or a bond that is held until the fulfillment of purchase terms. 

When Do We Use the Word Escrow?

An escrow can be used in a variety of scenarios. Here are some examples of the types of escrow accounts you may encounter.

In real estate, an escrow typically serves one of two purposes:

  1. An escrow can protect a buyer’s deposit that is given in good faith to ensure that when the conditions of the sale are complete the money will be given to the seller or the right party.
  2. An escrow can be used to secure the funds for the homeowner’s insurance and property taxes.

The distinct differences between these two purposes mean that one type of escrow is used for the home buying process and the other type is used throughout the life of the mortgage loan.

What Is an Escrow Agent?

The third party in many escrows is an escrow company, and your escrow account is handled by escrow agents. Your mortgage servicer may manage your escrow. 

Your mortgage servicer may refer to the escrow company as a “title company” during the home buying process. This is because the company not only holds the down payment of the buyer but often the deed from the seller or lender as well.

A borrower can feel better about the proper use of their funds because the escrow agents work in the best interest and independently from either party to ensure that transactions are carried out as they were agreed upon.

Why Do We Need an Escrow?

An escrow may benefit homebuyers because it can be difficult to come up with a lump sum of money to pay insurance or property tax payments. 

An escrow allows the payments to be broken up across your monthly payments throughout the year to cushion you from the burden of lump-sum payments when the tax bill shows up. 

Having monthly escrow payments built into monthly mortgage payments helps homeowners manage expenses and protects them from surprise payment amounts later on. 

One thing escrow accounts do not help with is Homeowners Association (HOA) fees. They will not pay for anything outside of the scope of their intended purpose, which is typically insurance payments and property tax bills.

A message to the Federally Insured Credit Unions from the National Credit Union Administration states that if the credit unions originate a higher-priced mortgage loan on a principal dwelling that’s secured by a first lien, they may be required to collect escrow payments for the first five years of the life of the loan. This is due to the requirements under the Truth in Lending Act.    

What Are Synonyms for Escrow?

An escrow is a pretty specific word, but language is a beautiful and versatile thing. Here are some synonyms for the word escrow:

  • Bond
  • Deed
  • Guarantee
  • Pledge
  • Security
  • Insurance

Are There Any Antonyms for Escrow?

There aren’t any one-word antonyms for the word escrow. An antonym is a word opposite in meaning to another word. An escrow is held until the fulfillment of an agreement is met by both parties. A broken promise is probably the closest thing to the opposite of escrow.

What Is the Past Tense of Escrow?

Because escrow is also a verb, it can be used in the past tense. The past tense of escrow is escrowed.

Examples of Escrow

Here are some examples of how to use escrow in a sentence:

  • When my father passed away, my inheritance was escrowed until I turned 21 years old.
  • I’m so thankful that the escrow payments built into my mortgage protect me from coming up with tax payments at the end of the year.
  • The down payment will be in escrow until closing.

Now, you can make your home buying dreams come to fruition with a complete understanding of the word escrow!


  1. Escrow | Wex | US Law | LII / Legal Information Institute 
  2. What is an escrow or impound account? | Consumer Financial Protection Bureau 
  3. New Escrow Requirements under the Truth in Lending Act | National Credit Union Administration