Property Taxes
Direct definition
Local government taxes assessed annually based on a property's assessed value.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Property taxes fund schools, public safety, and infrastructure. They're typically escrowed and paid by the lender from your monthly deposits.
Why it matters
Property taxes are a permanent part of homeownership cost and can rise materially year to year.
Where you may see it
- Loan Estimate
- Closing Disclosure
- Mortgage statement
- Escrow analysis
A real-world example
A home assessed at $400,000 in a 1.2% tax jurisdiction owes $4,800/year, or $400/month escrowed.
Educational and illustrative only
A common misunderstanding
Property taxes aren't fixed for the life of the loan — they can change as local assessments and tax rates change, affecting the escrowed payment.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026