According to a new report from LendingTree [1], although mortgage rates have fluctuated over the past several months, they remain relatively steep compared to record lows during the height of the COVID-19 pandemic. Because of this and persistently high home prices, new homebuyers could potentially shell out costly amounts for their mortgage payments.
To see how high mortgage payments can be and determine where borrowers can expect to spend the most and least amount of money on them, LendingTree analyzed mortgages offered to users of the LendingTree platform across the nation’s 50 states from Jan. 1 through March 31, 2023.
Data found that recent borrowers in every state can expect to spend an average of at least $1,700 a month on their monthly mortgage payments.
Key Findings:
- Nationwide, the average payment on a new mortgage is $2,317 a month. Average monthly mortgage payments can range from as high as $3,696 in Hawaii to as low as $1,700 in West Virginia.
- Monthly mortgage payments are the most expensive in Hawaii, California, and Massachusetts. In these three states, average mortgage payments are $3,696, $3,399, and $3,021, respectively. To put that into perspective, mortgage payments in the states are $1,379, $1,082, and $704 more expensive than the national average.
- Mortgage payments are the least expensive in West Virginia, Kentucky, and Michigan. Average mortgage payments in these states are $1,700, $1,711, and $1,742, respectively. Borrowers in these states spend $617, $606, and $575 less than the national average on their payments each month.
- Relative to income, mortgage payments are highest in Hawaii, Montana, and California. In Hawaii and California—two states where payments are over $3,000—the average mortgage payment is equivalent to 39.69% and 33.72% of the state’s average monthly household income. Though mortgage payments are lower in Montana (averaging $2,453 a month), lower household incomes mean that the average mortgage payment in the state is equivalent to 33.80% of the state’s average monthly household income.
States with the highest monthly mortgage payments
No. 1: Hawaii
- Average monthly mortgage payment: $3,696
- Difference between state and national average monthly mortgage payment: $1,379
- Average monthly household income: $9,313
- Mortgage payment as a percentage of income: 39.69%
No. 2: California
- Average monthly mortgage payment: $3,399
- Difference between state and national average monthly mortgage payment: $1,082
- Average monthly household income: $10,079
- Mortgage payment as a percentage of income: 33.72%
No. 3: Massachusetts
- Average monthly mortgage payment: $3,021
- Difference between state and national average monthly mortgage payment: $704
- Average monthly household income: $10,399
- Mortgage payment as a percentage of income: 29.05%
States with the lowest monthly mortgage payments
No. 1: West Virginia
- Average monthly mortgage payment: $1,700
- Difference between state and national average monthly mortgage payment: -$617
- Average monthly household income: $6,025
- Mortgage payment as a percentage of income: 28.22%
No. 2: Kentucky
- Average monthly mortgage payment: $1,711
- Difference between state and national average monthly mortgage payment: -$606
- Average monthly household income: $6,353
- Mortgage payment as a percentage of income: 26.93%
No. 3: Michigan
- Average monthly mortgage payment: $1,742
- Difference between state and national average monthly mortgage payment: -$575
- Average monthly household income: $7,174
- Mortgage payment as a percentage of income: 24.28%
Mortgage payments can be expensive, but not everyone spends an arm and a leg
Although mortgage payments owed by borrowers seeking new loans in 2023 can be steep, not everyone is shelling out in excess of $1,700 a month. Many borrowers make considerably lower payments.
Most people have fixed-rate mortgages. If they bought a new home or refinanced an old loan before rates started to dramatically rise in 2022, the monthly payments are unlikely to be as high as they would have been compared to a more recent loan.
To put into perspective, consider that median housing costs for homes with a mortgage in the U.S. are $1,672 a month, according to U.S. Census Bureau data. That figure includes other expenses like utilities and insurance fees and is much less than the national average monthly mortgage payment for loans offered in 2023 of $2,317.
To read the full report, including more data, charts, and methodology, click here [1].