Revolutionizing · Modernizing · Simplifying
Revolutionizing · Modernizing · Simplifying
Same rate. Same loan. Same house. Same everything.
And yet the mortgage payment just went up about
That is the phone call servicers all over Denver Metro have been fielding this summer. Jerad Larkin, a sales executive at Chicago Title Colorado, wrote about it in late August. Homeowners calling in a mild panic, convinced somebody made a mistake, because nothing about their actual mortgage changed. And they are right. Nothing did. The escrow account changed.
Here is the thing most people miss about that letter.
Your monthly payment is not just principal and interest. It is also the pile of money your lender collects to cover property taxes and homeowners insurance, held in escrow and paid out on your behalf. Once a year the servicer runs an escrow analysis, basically a reconciliation, to see if that pile is keeping up with the real bills.
In 2026, for a lot of Colorado homeowners, it is not.
So the letter shows up with two numbers on it. There is a lump sum you owe right now to cover the shortage. And there is a new, higher monthly payment going forward to keep the account funded. Under RESPA, your lender can only hold a two-month cushion, so when the account runs short you have two choices. Pay the shortage as one lump sum and blunt the monthly hit, or spread it over twelve months and feel it every single month. That is Regulation X, not your loan officer being difficult.
Nationally, Cotality projects about 65% of escrow accounts will come up short in 2026, with average deficits around
Except Colorado kind of is.
Since 2019, escrow costs in Colorado have jumped 77%. That is the highest in the nation, tied at the top with Florida at 70%, per Cotality data CNBC reported back in May. Think about that. Your escrow line has grown by more than three quarters in about six years, and a big chunk of that is property taxes climbing.
Now, why are the taxes climbing when your home value did not budge?
This is the part people get wrong. They assume a bigger tax bill means the county thinks their house is worth more. Not this time. Colorado only reassesses residential property in odd-numbered years. 2025 was the reassessment. 2027 is the next one. So in 2026, most homeowners never got a new Notice of Valuation. The value can sit completely flat and the bill still goes up.
What is actually happening is Colorado phasing in higher permanent assessment rates while local mill levies keep climbing. For tax year 2026, the residential local government rate is 6.8%, after a 10% reduction on the first $700,000 of actual value (capped at a $70,000 reduction). But school districts run on a separate track, 7.05% on your full actual value, thanks to HB24B-1001, which set those higher school rates starting in 2025.
That school piece matters a lot in Denver. Two-thirds of a Denver property tax bill funds Denver Public Schools. And the City and County of Denver actually held its own mill levy flat for 2026, then pointed at the school assessment change as the reason bills went up anyway.
The other big driver, per 9News back in February, is the expiration of a temporary $55,000 property-value exemption that had been in place under Senate Bill 24-233. That cushion is gone now. So even a flat-valued home loses the discount that was quietly keeping the bill down.
Put it together and some Colorado homeowners are seeing tax increases from 20% to more than 40%. In Centennial, retiree Mike Fitz watched his 2026 Arapahoe County bill hit $5,435.47, up nearly 30% over two years, and that was even after a senior homestead discount. Colorado Politics reported that one in January. When your taxes do that, your escrow account cannot possibly keep up on the old monthly number. Hence the letter.
First, that shortage. Run the math on paying it as a lump sum versus spreading it over twelve months. If you have got the cash, the lump sum keeps your monthly payment from ratcheting up permanently. If you do not, the twelve-month spread is there for a reason.
Second, and this is the move most people skip, you cannot protest your 2026 value because there is no general protest window this year. What you can fight is the 2027 value, and that reassessment is coming. So gather your documentation now. Comparable sales, any condition issues, photos. One more thing to watch, both Denver and Arapahoe County have shifted tax notices online to cut costs (Denver says it is saving nearly 500,000 sheets of paper and about
And if you are looking at the market itself, Denver's July median was $605,000, down about 1.5% from June but up nearly 3% year-over-year, with detached homes at a $660,000 median and roughly 17 median days on market, per DMAR. Prices held. Rates held.
Your payment moved anyway. Now you know exactly who to blame.