What’s the average mortgage payment? A concise guide

If you’re planning to buy a home or already paying off a mortgage, it helps to know how your monthly costs compare to national trends. The national average mortgage payment gives a useful reference point, but it doesn’t tell the whole story — what homeowners actually pay each month can vary widely depending on location, loan terms, taxes, insurance, and more.

This guide looks at how much an average mortgage is, explains what’s included in a mortgage payment, and breaks down the factors that influence how much homeowners pay each month.

What’s included in an average mortgage payment?

A mortgage payment covers more than you might expect. Alongside repaying the loan itself, there are several other costs bundled into that monthly total. 

Here are some of the most common ones:

— Loan principal: This is the amount borrowed after subtracting your down payment. The bigger your down payment, the smaller the loan and the lower your monthly payment.

— Loan interest: Interest is what the lender charges for lending you funds. Rates vary depending on your credit, the market, and the type of loan. They play a major role in what your monthly costs look like.

— Property taxes: These are collected by your local government and fund things like schools, roads, and emergency services. Most lenders include property taxes in your monthly bill and manage the payments for you through an escrow account.

— Homeowners insurance: Insurance protects your home against things like fire, weather damage, and theft. Lenders usually require it, and they often include the monthly premium in your total mortgage payment.

— Private mortgage insurance (PMI): If your down payment is under 20% and you’re using a conventional loan, PMI may be required. This type of insurance protects the lender if the loan goes unpaid.

— HOA fees: If your home is part of a homeowners association, expect a monthly fee to cover shared services like landscaping, trash pickup, or neighborhood amenities. These are typically billed separately from your mortgage payment.

What’s the average mortgage payment in the United States?

Based on recent data, the average monthly payment for a house is about $2,715 for a 30-year fixed loan. For a 15-year fixed mortgage, it’s closer to $3,552. These numbers reflect the total principal and interest only. They don’t include property taxes, homeowners insurance, or other added costs, which can vary significantly by location.

The median monthly payment is $2,617. Since the median mortgage payment reflects the midpoint of all borrowers rather than the average across all payments, it can offer a more accurate picture of what most people are actually paying.

Average mortgage payments by state

Monthly mortgage costs look very different depending on where you live. The table below lists average monthly payments by state:

State	Average Monthly Mortgage Payment
Alabama	$1,200
Alaska	$2,214
Arizona	$2,502
Arkansas	$1,132
California	$4,536
Colorado	$3,082
Connecticut	$2,723
Delaware	$2,120
Florida	$2,443
Georgia	$1,928
Hawaii	$5,253
Idaho	$2,536
Illinois	$1,771
Indiana	$1,367
Iowa	$1,372
Kansas	$1,371
Kentucky	$1,144
Louisiana	$1,108
Maine	$2,350
Maryland	$2,530
Massachusetts	$3,758
Michigan	$1,455
Minnesota	$1,995
Mississippi	$986
Missouri	$1,441
Montana	$2,605
Nebraska	$1,647
Nevada	$2,506
New Hampshire	$3,189
New Jersey	$3,657
New Mexico	$1,701
New York	$2,735
North Carolina	$1,903
North Dakota	$1,517
Ohio	$1,418
Oklahoma	$1,183
Oregon	$2,949
Pennsylvania	$1,658
Rhode Island	$2,842
South Carolina	$1,639
South Dakota	$1,812
Tennessee	$1,776
Texas	$1,984
Utah	$2,936
Vermont	$2,574
Virginia	$2,251
Washington	$3,452
West Virginia	$875
Wisconsin	$1,885
Wyoming	$1,899

These differences reflect more than just home prices. Local property tax rates, insurance costs, and even utility fees can raise or lower the monthly total.

Average mortgage payment by city

Major cities often come with higher home prices, which means higher mortgage payments to match. Here’s a look at the typical mortgage payments in the eight biggest U.S. cities, listed from highest to lowest:

City	Average Monthly Mortgage Payment
New York, New York (Manhattan)	$13,535.42
Los Angeles, California (Long Beach)	$5,847.37
San Diego, California	$5,168.91
Chicago, Illinois	$2,578.06
Phoenix, Arizona	$2,561.11
Philadelphia, Pennsylvania	$2,169.88
Houston, Texas	$1,890.77
San Antonio, Texas	$1,699.62

What factors can influence the average mortgage payment?

While national averages offer a helpful starting point, the actual amount you’ll pay each month can vary widely. Small differences in these areas can add up, which is why it’s helpful to look at the full picture when estimating your monthly payment, not just the loan amount.

Here are the main factors that affect your monthly payments:

— Home price: More expensive homes require larger loans, which usually lead to higher monthly payments, unless they’re offset by a large down payment.

— Down payment size: A larger down payment reduces how much you borrow and may help you avoid PMI, both of which can lower your monthly costs.

— Loan term: Loans with longer terms, like 30 years, tend to have lower monthly payments. Shorter-term loans, like 15 years, come with higher payments but save you money on interest over time.

— Interest rate: Your mortgage rate directly affects your monthly payment. Lower rates lead to lower monthly costs. Your interest rate depends on both market conditions and factors like your debt-to-income ratio and credit score.

— Taxes and insurance: Property taxes and homeowners insurance are often paid monthly through your lender. These costs can be quite different from one region to the next, so it’s worth researching them while comparing homes.

How to calculate your mortgage payment

There are two main ways to figure out what your monthly mortgage payment might look like: You can calculate it manually, or you can use an online mortgage calculator.

Manual calculation

Here’s the formula used to calculate monthly principal and interest by hand:

M = P (I(1 + I)^N) / ((1 + I)^N – 1)

Where:

— M is your monthly payment.

— P is your loan amount.

— I is your monthly interest rate (your annual rate divided by 12).

— N is the number of months in your loan term.

Here’s an example to illustrate the process. Say you’re buying a home for $500,000 with a 20% down payment ($100,000). That leaves a loan amount of $400,000. You’ve chosen a 30-year fixed-rate mortgage with a 6% interest rate. So:

— P = 400,000

— I = 0.06 / 12 = 0.005

— N = 30 * 12 = 360 months

Plug these into the formula:

M = 400,000 × (0.005(1 + 0.005)^360) / ((1 + 0.005)^360 – 1)

So, the monthly payment is $2,398.20.

Once you have your result, you’ll still need to add in the monthly amounts for property taxes, homeowners insurance, and potentially HOA fees to get the full picture of what you owe.

Using a mortgage calculator

A mortgage calculator makes finding your monthly payments much easier.

Better’s mortgage calculator lets you plug in key numbers — like home price, down payment, interest rate, and loan length — to see an estimated monthly payment. It also breaks that number down by category so you can see where each dollar is going.

Trying out different inputs can change your monthly payment. This might mean changing the down payment from 10% to 20% or comparing a 30-year versus a 15-year loan. For buyers comparing homes in different price ranges, a calculator can quickly reveal what’s truly affordable.

Better also offers a fast online application that gives you a personalized mortgage estimate in as little as three minutes, based on current rates and your financial details.

...in as little as 3 minutes – no credit impact

Tips for managing mortgage payments

Even when your payments are predictable, there are ways to make monthly budgeting easier and reduce your long-term costs. Here are a few strategies that can help:

— Refinance your mortgage: If interest rates have gone down since you bought your home, refinancing could lower your monthly payment. It may also help you move to a fixed-rate loan or a longer loan term. In some cases, refinancing can get rid of PMI once you’ve built up enough equity.

— Make extra payments: Paying a little more than the required amount each month or making periodic lump-sum payments can reduce your loan balance faster and cut down on interest. Just make sure your lender applies the extra toward your principal.

— Adjust your budget: If you’re on an adjustable-rate loan, it’s also a good idea to watch interest rate trends and prepare for possible changes — if there’s an increase in interest rates being forecasted, you may have to set aside more money each month.

Know exactly what to expect before you make your next move

Understanding what goes into a monthly mortgage payment and how much it might fluctuate can make a big difference when planning a home purchase. From principal and interest to taxes and insurance, every piece of the puzzle has an impact on your budget and your overall homeownership experience.

Better makes the process simple with a digital platform designed to help you understand your options from the start, with no hidden fees. In as little as three minutes, you can apply online and get a personalized view of what your monthly payments might look like based on current mortgage rates and your financial profile.

Discover how you can finance your dream home with Better by your side.

...in as little as 3 minutes – no credit impact