What Is the Average Monthly Mortgage Payment?

Are you trying to decide if you can afford a mortgage? Or are you already on the hunt for the perfect home? Either way, if you know what the average monthly mortgage payment is, it might help put your own home purchase into perspective. 

How much is the average American paying per month for their mortgage? Let’s break it down and find out how much home sweet home really costs. 

What’s the Average Mortgage Payment?

We don’t want to waste your time, so let’s get down to business. The median monthly mortgage payment is just over $1,600, according to the U.S. Census Bureau.¹ That can vary of course, based on the size of the house and where you live, but that’s the ballpark number. 

If you’re the kind of person who doesn’t need to know how we came up with the number $1,600, feel free to skip to the next section. But if you want more details—including how to calculate your own average payment—read on! 

How’s that average calculated?

The first thing to keep in mind is that the U.S. Census Bureau reports the median monthly mortgage, which technically isn’t the same as the average monthly mortgage payment (mathematicians in the audience are nodding their heads enthusiastically).

To find the median, you order the numbers you have from least to greatest and take the number in the middle:

$1,450, $1,500, $1,600, $1,700, $4,600

Now, if you average these numbers, you get $2,170. Is that a fair representation? Definitely not—nearly every number in that line is below $2,025 by a lot. 

But if you look at the median, which is $1,600, you can see it’s more accurate, isn’t it?

Oh yeah, it is. That’s why we take the median—so homeowners with multimillion-dollar mansions or cheaper-than-cheap houses can’t skew the final average.

With that in mind, let’s take a quick look at the Census Bureau’s data.

 

Monthly Housing Cost 2	Number of Homeowners
Less than $200	27,555
$200 to $399	206,552
$400 to $599	1.11 million
$600 to $799	2.91 million
$800 to $999	4.59 million
$1,000 to $1,499	13.02 million
$1,500 to $1,999	10.15 million
$2,000 to $2,499	6.4 million
$2,500 to $2,999	3.92 million
$3,000 or more	6.28 million
Median	$1,609

 

Basically, the U.S. Census Bureau claims that if you were to list every monthly payment (all 48 million of them) from smallest to largest, you'd find that the one in the middle is $1,609.

How Does the Monthly Mortgage Change by Generation?

Who spends the most per month? Gen Xers have the highest median monthly payment, but that’s because they’re buying the most expensive houses. Millennials have the second highest median, not because they’re buying more expensive houses, but because they’re putting down smaller down payments.

 

Generation3	Median Home Purchase	Median % of Down Payment	Approximate Monthly Mortgage*
Millennial	$264,500	8%	$1,623
Generation X	$305,000	13%	$1,779
Baby Boomer	$273,850	20.5%	$1,403
Silent Generation	$266,700	21%	$1,368

*Based on a 30-year fixed-rate mortgage—plus approximate costs of insurance, taxes and PMI.

How Does It Change by the Price of a Home? 

Once you know how much home you can afford, you can easily calculate your monthly mortgage payment. To give you an idea, we’ve listed a range based on a 15-year fixed-rate mortgage (including the approximate costs of insurances, taxes, and PMI). But you can always figure it out yourself with our mortgage calculator.

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Price of Home	10% Down Payment	20% Down Payment
$150,000	$1,240	$1,075
$200,000	$1,630	$1,410
$250,000	$2,020	$1,745
$300,000	$2,410	$2,080

 

What’s Included in a Monthly Mortgage Payment?

We’ll give you a hint: It’s not just your mortgage balance. Every mortgage payment has four legs: principal, interest, property taxes and homeowner’s insurance. 

What’s the principal?

This principal is not your pal. It’s the sum you borrow from your lender. It’s the amount you’re expected to pay back. Unless you take out a ridiculous interest-only mortgage (which forces you to waste a ton of money paying only interest and no principal), you’ll pay down the principal every month—little by little by little. 

Interest?

Your lender has to make money too, you know, and that’s what interest is designed to do. Every month, your lender gets a piece of the pie—based on a percentage of the amount you borrowed. But hey, at least there aren’t any surprises when you choose a fixed-rate mortgage (adjustable-rate mortgages are a whole other ballgame that you don’t want to play). Your lender will set your interest rate at the beginning of your loan term based on things like your credit score and down payment. Most buyers have to pay fees called loan level price adjustments in the form of a slightly higher interest rate. But as long as you get a fixed-rate mortgage, you’ll pay that same interest rate for the life of the loan.

How about property taxes? 

You can’t escape taxes—period. From the moment you buy a house, until, well, forever, your local government makes you pay property taxes. How do they calculate these taxes? They’ll send a property assessor to find out how much your house is worth, then they’ll use that number to figure out how much you owe them. 

You mean, there’s insurance too? 

Yep. Once you buy a house, you’ll need to get homeowner’s insurance. It may not be the most exciting housewarming gift, but you absolutely must have it. Talk to an insurance agent to make sure you’re getting the right amount of coverage for the right price. 

What do these look like altogether?

Let’s say you buy a gorgeous $200,000 house on a 20% down payment ($40,000). In this scenario, you’d have to borrow $160,000. On a 15-year mortgage with a fixed interest rate of 4%, you’d pay around $1,184 a month—that’s principal and interest. 

But wait. There’s still tax and insurance. So let’s say one of our ELP insurance agents hooked you up with a sweet deal and got you homeowner’s insurance for $75 a month. Then let’s say your local government charges you $1,400 a year for property taxes (about a 0.7% tax rate) or $117 per month. Add all these numbers together, and you have your monthly mortgage.

 

Principal + Interest	Tax	Insurance	Complete Monthly Mortgage Payment
$1,184	$117	$75	$1,376

 

How Much Monthly Mortgage Payment Can You Afford?

We’ve looked at the median monthly mortgage payments, and you’ve even learned how one is calculated. But now the big question remains: How much mortgage can you afford?

Once you’ve set a ballpark housing budget, give Churchill Mortgage a call. Not only will they help you get a mortgage the smart way (avoiding all the dumb options that keep you in debt forever), but they’ll also pay close attention to your budget and make sure you can actually afford it. They’re real friendly folks. Get started with one of their loan specialists today! If you’re wondering how much you can afford, don’t sit around twiddling your thumbs. Get answers from a trustworthy lender now!