Lowest projected escrow account balance during an escrow-analysis cycle.
Low-point balance is the lowest projected escrow account balance during an escrow-analysis cycle.
Low-point balance matters because a servicer is not only checking whether the escrow account has money today. It is also checking whether the account is projected to dip too low after future tax and insurance bills are paid.
It also matters because the lowest point in the projection can drive whether the borrower has an escrow shortage, surplus, or changed monthly escrow payment.
Borrowers may see low-point balance on an escrow-analysis statement, annual escrow statement, or detailed escrow worksheet.
The term becomes practical when the borrower sees that the account looks adequate now but still produces a shortage because the projected low point falls below the required or target level.
| Term | Borrower-facing distinction |
|---|---|
| Low-point balance | Lowest projected account balance during the cycle |
| Projected Escrow Balance | Forecasted balance at different points in the cycle |
| Target Escrow Balance | Balance the servicer expects the account to maintain |
| Escrow Shortage | Gap when projected funds are not enough |
An escrow account has a healthy balance in January, but the projection shows it will drop sharply after a large tax disbursement in July. That July amount may be the low-point balance.
Low-point balance differs from Escrow Balance because escrow balance usually describes a current amount, while low-point balance is the lowest projected amount during the analysis period.
It differs from Escrow Cushion because the cushion is a planned buffer, while low-point balance is a projection result.
It also differs from Escrow Surplus because surplus means the account has more than it needs after analysis, while low-point balance focuses on the lowest expected account level.