Why I Stopped Using Mortgage Escrow (And Saved Thousands)
Sat Jan 31 2026
Many homeowners don't realize that their mortgage lender is essentially getting a free loan from them every month. In this episode of Everyday Money Heroes, Nik Johnson breaks down why he decided to cancel his mortgage escrow account and how you can do the same to reclaim your financial sovereignty. By managing your own property taxes and home insurance, you can move those funds into a high-yield savings account to earn the interest yourself instead of letting the bank keep it.This strategy isn't just about the "sweet interest." It’s a tool for disciplined investors who want to maximize credit card bonuses by using property insurance payments to meet minimum spend requirements. However, this level of financial freedom comes with significant responsibility. Nik explains the dangers of failing to pay property taxes, including the risk of tax deeds and potential home loss, while still being responsible for the mortgage. If you have the "saving muscle" and discipline, this video provides the blueprint to take full control of your financial journey and stop giving away your potential earnings to the lender.The BreakdownHow lenders profit from your interest-free escrow payments.The benefits of using high-yield savings for tax and insurance funds.Using large insurance payments to trigger massive credit card bonuses.The critical risks of not using escrow: Tax deeds and home foreclosure.Key Moments00:00 Introduction02:37 What is Escrow 04:27 Why I stopped using mortgage escrow06:05 Benefits of Not Using Escrow12:29 How To Remove Escrow 16:35 Is Not Using Escrow Right For you17:13 Warning: The Discipline Required to Manage Taxes
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Many homeowners don't realize that their mortgage lender is essentially getting a free loan from them every month. In this episode of Everyday Money Heroes, Nik Johnson breaks down why he decided to cancel his mortgage escrow account and how you can do the same to reclaim your financial sovereignty. By managing your own property taxes and home insurance, you can move those funds into a high-yield savings account to earn the interest yourself instead of letting the bank keep it.This strategy isn't just about the "sweet interest." It’s a tool for disciplined investors who want to maximize credit card bonuses by using property insurance payments to meet minimum spend requirements. However, this level of financial freedom comes with significant responsibility. Nik explains the dangers of failing to pay property taxes, including the risk of tax deeds and potential home loss, while still being responsible for the mortgage. If you have the "saving muscle" and discipline, this video provides the blueprint to take full control of your financial journey and stop giving away your potential earnings to the lender.The BreakdownHow lenders profit from your interest-free escrow payments.The benefits of using high-yield savings for tax and insurance funds.Using large insurance payments to trigger massive credit card bonuses.The critical risks of not using escrow: Tax deeds and home foreclosure.Key Moments00:00 Introduction02:37 What is Escrow 04:27 Why I stopped using mortgage escrow06:05 Benefits of Not Using Escrow12:29 How To Remove Escrow 16:35 Is Not Using Escrow Right For you17:13 Warning: The Discipline Required to Manage Taxes