What your mortgage lender isn’t telling you about property taxes could be quietly costing you.

Why Letting Your Lender Pay Your Property Taxes May Be Costing You More Than You Realize
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While it may seem convenient to have your mortgage lender handle your property tax payments, the reality is that this arrangement often results in reduced financial efficiency and less control over your own money.

Lenders don’t just collect the exact amount due for taxes—they routinely collect more. Each month, they inflate the payment amount to build a surplus in an internal tax account held in your name, but not in your control. This overpayment sits idle, earning you nothing, and remains unavailable for more productive uses like investing, saving, or managing cash flow.

Why does this happen? Because property taxes typically increase by 3–5% annually. Rather than revisiting your payment schedule each year, lenders preemptively overcharge to ensure they’re covered—regardless of the actual increase. While any excess may be refunded eventually, it remains tied up in the interim, serving institutional convenience rather than your financial strategy.

This issue isn't about convenience—it's about efficiency, autonomy, and liquidity. In today’s economic climate, where every dollar counts, it’s essential to ensure your funds are working for you, not sitting idle in someone else’s system.

Fortunately, there’s a simple solution. You can bypass the lender altogether by setting up a pre-authorized payment plan directly with your municipality. This gives you complete control over your tax payments while keeping your capital where it belongs—with you.

The standard should be clear: No one should collect more than is owed, and no borrower should be kept in the dark about how their money is being managed.

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