Average Mortgage Payment By City And State
If you’re considering becoming a homeowner, your first question is probably about cost. Like rent, a mortgage is a monthly housing payment. But instead of paying a landlord, you repay the lender you borrowed money from to finance your home purchase – plus interest, taxes and insurance.
Despite rising home values and rates, homeownership remains affordable, even in most urban areas. In the earliest stages of buying a home, it can be helpful to look at the average mortgage payments in your desired location to estimate how much your mortgage payment may be.
What’s The Average Monthly Mortgage Payment?
If you’re starting to think about buying a home, you’re probably trying to estimate a ballpark figure of your potential monthly mortgage payment. While the national average monthly mortgage payment offers a starting point, your payment can differ significantly depending on your location, the home, the home loan interest rate and the type of mortgage you choose. It’s also impacted by additional personal factors such as your creditworthiness and financial situation.
According to the 2023 Annual Cost of Living Index from the Council for Community and Economic Research, or C2ER, the national average monthly mortgage payment is $2,390. This figure only reflects mortgage principal and interest, not property taxes or insurance.
C2ER’s national figure differs from the median monthly payment in the U.S., which is $2,006. The median represents the middle value among mortgages nationwide, which is helpful because it ignores the high and low extremes in the mortgage market.
Remember, the national average monthly mortgage payment takes the entire country into account. Monthly payments can significantly vary from state to state and within states. For instance, major cities typically have higher mortgage costs than rural areas. You can see this when you compare average mortgage payments in Chicago versus downstate Illinois.
Ultimately, your local real estate market may determine your mortgage payment more than the national average.
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What’s In An Average Mortgage Payment?
When you make a monthly mortgage payment, you’re paying back a portion of the money you borrowed, plus interest. PITI – which stands for principal, interest, taxes and insurance – more accurately represents what goes into your mortgage payment:
- Principal: The principal refers to your mortgage loan balance. Each month, you pay back a portion of what you borrowed to buy your home. Making a larger down payment reduces the principal amount.
- Interest: Your principal balance accrues interest according to the rate your lender set when it provided the loan. In other words, lenders charge interest in exchange for the money they lend you for the mortgage.
- Taxes: Property taxes are local taxes that pay for public services, such as schools and parks. Your lender deposits a portion of your mortgage payment into an escrow account and uses the money to pay your taxes to the local government on your behalf.
- Insurance: Lastly, you pay homeowners insurance and private mortgage insurance premiums, if applicable. Borrowers pay mortgage insurance if they put down less than a 20% down payment.
Average National Costs
| Average Inputs | Contribution To Monthly Payments |
|---|---|
| Home price | $429,000 |
| Interest rate | 6.79% |
| Down payment (median) | 14% |
| Homeowners insurance | $231 per month |
| Annual property taxes | 1.1% of home price |
How To Calculate Average Monthly Mortgage Payment
You can plug your numbers into the following equation, and add your homeowners insurance and property tax payments to the result:
M = P [I(1 + I)^N] / [(1 + I)^N – 1]
P stands for principal. I stands for the monthly interest rate, and N stands for the total number of months in the mortgage term.
Here’s a step-by-step example using the national averages provided in the previous section:
- You buy a home for $429,000 and put down 14%, or $60,060.
- You borrow $368,940 to purchase the home. Your interest rate is 6.79%, and your mortgage term is 360 months (30 years).
- Use and fill in the equation above: M = P [0.56583333(1 + 0.56583333)^360] / [(1 + 0.56583333)^360 – 1].
- Your principal and interest payment is $2,430 before taxes and insurance.
- Add $2,430, the monthly $231 homeowners insurance payment ($2,777 per year) and the monthly $393 property tax payments ($4,719 per year).
- Your total monthly mortgage payment would be about $3,055.
If you take out a conventional loan and your down payment is less than 20%, you’ll likely need to add PMI. PMI typically averages around 0.1% – 2% of your total loan amount.
Average Mortgage Payment Where You Live
If you don’t want to do all that math, you can use our mortgage calculator to estimate your monthly mortgage payment. Your ZIP code is a key piece of information because local real estate markets drive the cost of housing in your area.
While a calculator can provide a solid starting estimate, an initial approval letter is better. Prioritize getting a letter before you start working with a buyer’s agent and looking for a home. Initial approval, or preapproval, will provide a better idea of how much house you can afford and your estimated monthly mortgage payment because a lender will review your finances.
Getting preapproved first means you have a lender’s financial backing, signaling your seriousness and financial capability to sellers and real estate agents.
Get matched with a lender that can help you find the right mortgage.
Average Monthly Mortgage Payment By State
When shopping for a mortgage, it’s helpful to know whether you’re in a state with the highest or lowest mortgage payments. The following tables break down the top 10 states in each category. Our estimates only reflect principal and interest, not property taxes or insurance.
Top 10 States With The Highest Average Mortgage Payment
| State | Average Monthly Payment |
|---|---|
| Hawaii | $8,009 |
| District of Columbia | $5,844 |
| California | $4,952 |
| Massachusetts | $4,746 |
| New York | $4,389 |
| Maryland | $3,363 |
| Oregon | $3,239 |
| New Jersey | $3,151 |
| Washington | $3,116 |
| Arizona | $3,088 |
Top 10 States With The Lowest Average Mortgage Payment
| State | Average Monthly Payment |
|---|---|
| West Virginia | $1,614 |
| Alabama | $1,706 |
| Kansas | $1,709 |
| Oklahoma | $1,713 |
| Mississippi | $1,754 |
| Georgia | $1,789 |
| Indiana | $1,796 |
| Pennsylvania | $1,809 |
| Illinois | $1,809 |
| Kentucky | $1,809 |
Average Monthly Mortgage Payment By City
City real estate markets are entities unto themselves, operating independently of nearby markets. Although city living is generally more expensive, the following stand out with the highest and lowest average monthly mortgage payments.
Top 10 Cities With The Highest Average Mortgage Payment
| City | Average Monthly Payment |
|---|---|
| Manhattan, NY | $13,535 |
| San Jose, CA | $8,581 |
| Honolulu, HI | $8,009 |
| San Francisco, CA | $7,224 |
| Brooklyn, NY | $6,917 |
| Orange County, CA | $6,554 |
| Los Angeles, CA | $5,847 |
| Washington, DC | $5,844 |
| Arlington, VA | $5,381 |
| Queens, NY | $5,236 |
Top 10 Cities With The Lowest Average Mortgage Payment
| City | Average Monthly Payment |
|---|---|
| Decatur, IL | $1,317 |
| Erie, PA | $1,319 |
| Muncie, IN | $1,325 |
| Charleston, WV | $1,347 |
| McAllen, TX | $1,365 |
| Utica, NY | $1,404 |
| Anniston-Calhoun, AL | $1,405 |
| Kalamazoo, MI | $1,416 |
| Scranton, PA | $1,417 |
| Lawton, OK | $1,419 |
FAQ
Below are a few frequently asked questions about monthly mortgage payments.
The Bottom Line
While national mortgage trends offer a broad picture of current real estate market dynamics, understanding your local real estate market is crucial for planning your future home purchase. The more accurate your home buying plan, the smoother the process will be.
Methodology
The average mortgage payment by state and city are sourced from the Council for Community and Economic Research 2023 Annual Cost of Living Index. The median down payment is based on the National Association of Realtors 2023 Home Buyers and Sellers Generational Trends Report.
To estimate the average mortgage payment for each state, we used the national average down payment (14%) from the NAR Trends Report and interest rate (6.79%) from the C2ER 2023 Report. The median sales home price is data reported from 10/1/22 – 10/1/23 from FRED. The national average homeowners insurance comes from Insurance.com and is based on a $300,000 liability and dwelling coverage with a $1,000 deductible.
