Mortgage Payment Estimates for Tennessee by Home Price

Why the Tennessee payment looks the way it does

Between the two non-financing costs on a $300,000 home — the price point closest to the statewide median — insurance edges out property tax in Tennessee: $197/mo against $115/mo. Annual premiums here average $2,364 and sits close to the national average ($2,543 nationally). Property tax is the standout figure here: Tennessee has one of the lowest effective property tax rates in the country — the 46th-lowest of 51.

Tennessee's median home price slipped 2.8% over the past year, per Zillow — a mild pullback that changes the arithmetic above only for future buyers, since the rate and tax figures here are locked to today's price. Prices vary widely by metro: Nashville at $438,000, Brentwood at $870,000, Knoxville at $325,000, Memphis at $162,000, Chattanooga at $305,000, all per Zillow ZHVI 2026.

The math, step by step

Using the price point closest to Tennessee’s own median — $300,000 — here is how every line item adds up to the monthly payment:

Start with financing. At Freddie Mac Primary Mortgage Market Survey's 2026-06 rate of 6.4% on a standard 30-year fixed loan, a $240,000 loan (20% down on a $300,000 home) amortizes to a principal-and-interest payment of $1,501/mo. Put down only 10% instead and the loan grows to $270,000, which raises principal and interest to $1,689/mo — $188 more every month for a loan that's $30,000 larger, before tax, insurance, or PMI enter the picture.

Property tax adds $115/mo, derived by applying Tennessee's 0.5% effective rate (Tax Foundation, statewide average across all taxing jurisdictions) to the home's assessed value and dividing by twelve. That statewide figure hides real county variation: Shelby County (Memphis) taxes at 0.7% against 0.3% in Pickett County — a 2.4x spread between the two, so the true monthly tax line on any specific property in Tennessee depends heavily on which county it sits in. How that assessed value itself gets set also varies: Reappraisal every 4–6 years depending on county (4-year cycle for most urban counties; 6-year for rural). Residential property assessed at 25% of appraised value. And the $115/mo figure above is the pre-exemption number: an owner-occupant can bring it down further — Property Tax Relief for elderly (65+) and disabled homeowners with income below $31,600: state reimburses a portion of county taxes. Tax Freeze program available in many counties — freezes taxable value for qualifying seniors. Assessment ratio for residential property is 25% of appraised value.

Tornadoes and 3 other named risks are the kind Tennessee insurers price into every policy — the reason the $2,364/yr average premium (÷12 = $197/mo) sits where it does; this is the same per-price-point figure the table above sums, so the two always agree by construction. Unlike principal and interest, that line is flat: it doesn't move with the down payment. Note: this is an earlier snapshot of the same Insurance.com series RealCostIQ now publishes at $3,198/yr in the Insurance section below — the PITI math above hasn't been rebuilt against the newer figure yet, so treat the monthly line here as the modeling basis and the figure below as the current published rate.

Those three lines total $1,813/mo at 20% down — matching the table above, since 20% down clears the PMI threshold here. 20% down ($60,000) skips PMI. 10% down ($30,000) adds it at 0.46% of the loan a year (mortgage-insurer rate card, 720–739 credit score), or $104/mo — $2,104 total instead of $1,813. You can ask the lender to cancel it around month 94, when the balance reaches $240,000 (80% of the original price) — roughly $9,729 paid in before then. If you don't ask, the Homeowners Protection Act requires it to end automatically when the balance is scheduled to reach 78%.

At this $300,000 price point specifically: qualifying at 20% down takes $77,709/yr under the 28% rule ($60,440/yr under the looser 36% rule); at 10% down it's $90,187/yr — $12,478 more, a meaningful jump — dropping to 10% down doesn't just mean a smaller check at closing, it raises the bar to qualify. A household earning Tennessee's own median income of $59,695 falls short of the 20%-down bar at this specific price point, by $18,014 — this price point requires an above-median income here. At 10% down, where the higher loan amount raises the bar further, that same median household falls short by $30,492.

What financing costs across the price range

Total interest over the full 30-year term at 20% down runs from $200,291 on a $200,000 Tennessee home to $751,093 on a $750,000 one — both figures assume the loan is held to term with no extra principal payments. At the $300,000 price point used throughout this page, that works out to $300,437 in interest on a $240,000 loan. At 10% down instead, PMI adds $6,486 in total premiums on the $200,000 home before it cancels, and $24,323 on the $750,000 home — cost that buys nothing but the right to put down less cash up front, and that a 20%-down buyer avoids at either price.

At 20% down and the 28% front-end DTI rule, a $200,000 home in Tennessee needs $54,620/yr to qualify, while a $750,000 home needs $181,609/yr. That's the binding number for a buyer with no other debt. Once other debt is added to the picture, the 36% back-end ratio is the one that governs, and it takes less income to clear — $42,483/yr and $141,251/yr for the same two homes — but only because it's now competing with a car payment or student loan for that same 36%, not because the home got cheaper to finance. That statewide range plays out locally too: Memphis's median of $162,000 and Brentwood's median of $870,000 sit on opposite ends of the same qualifying-income curve.

Can a median-income household actually afford this?

The gap is severe: a household earning Tennessee's median income of $59,695 is $24,691 short — 41% below — the $84,386/yr a lender would want to see on the median-priced home at 20% down at 7.03% (Freddie Mac PMMS, week of September 24, 2026). Lenders check two DTI thresholds, not one: the 28% front-end ratio covers housing costs alone ($77,709/yr at this page's $300,000 price point and its 6.4% rate), while the looser 36% back-end ratio also counts other debt and takes less income to clear on housing alone — $60,440/yr here. The catch: that 36% is shared with a car payment or student loan, so a buyer carrying other debt can end up needing MORE total income than the 28% figure suggests, not less. The two income figures use different rates — 6.4% for this page's price points, 7.03% for the median-home figure — so they are not directly comparable. The price a median-income household can actually afford under the 28% rule at 7.03% (Freddie Mac PMMS, week of September 24, 2026) is $212,847 — $100,697 below the statewide median of $313,544. That gap is not uniform statewide: Williamson County, Davidson County, Rutherford County price out median earners fastest, while Lake County, Hancock County, Pickett County stay within reach on a median income.

Cash to close

Tennessee's closing costs sit at the high end of typical for the country — 2.3% of the purchase price (Below average — very low transfer tax and no income tax make Tennessee a low-cost state overall). On this $300,000 home that's $6,900. Title insurance ($1,300) is a relatively small slice of that figure — the rest is lender, escrow, and recording fees. Layered on top of the down payment, total cash to close runs $66,900 at 20% down or $36,900 at 10% down — the closing-cost portion is identical either way; only the down payment changes. Unlike property tax — which runs 0.7% in Shelby County (Memphis) versus 0.3% in Pickett County — closing costs don't swing nearly as much by county; the figure above is a reasonable statewide planning number wherever in Tennessee the home sits. Tennessee Documentary Tax: $0.37 per $100 of consideration on the deed (0.37%). Tenn. Code Ann. 67-4-409 and the TN Dept. of Revenue name the GRANTEE (buyer) as the party who pays this tax — it is genuinely buyer-only, not seller-paid. Additionally, mortgage recordation tax of $0.115 per $100 on the loan amount (0.115%), also paid by buyer — but the first $2,000 of the indebtedness is excluded from this mortgage tax (TN Dept. of Revenue, Recordation Tax Manual, March 2023, read 2026-09-28: "the tax is equivalent to 11.5¢ on each $100 of the indebtedness so evidenced. However, it does not apply with respect to the first $2,000 of the indebtedness"). On this $300,000 home, that's roughly $1,110 of the total. Tennessee does not require an attorney at closing, though buyers may hire one at their own cost. Once the sale closes, Tennessee homeowners can file for the homestead exemption described in the property-tax section above — it isn't automatic, and it only reduces the tax line going forward, not any cost at the closing table itself.

Insurance and flood risk

Tennessee homeowners pay an average of $3,198/yr for homeowners insurance at $300,000 dwelling coverage ($267/mo), per Insurance.com — Average homeowners insurance rates by state (Rate Analysis 2026) — against a national average of $2,765/yr. The named factors — each explained below — are tornadoes, flooding, severe hailstorms, ice storms. That ranks 16th most expensive of the 51 states and D.C. — 116% of the national average. The private insurance market has not seen the large-scale carrier exits reported in some higher-risk states. Flood risk is moderate; 1.8% of homes carry NFIP coverage, concentrated in Cumberland River corridor (Davidson County — Nashville) and Tennessee River communities (Humphreys, Perry, Decatur counties). The average NFIP premium runs $889/yr, and lenders require coverage in FEMA Zones Zone A, Zone AE. Premiums vary sharply by county: Carter County (~$1,300/yr), Unicoi County (~$1,400/yr), Johnson County (~$1,500/yr) run cheapest, while Shelby County (~$2,800/yr), Tipton County (~$2,700/yr), Lauderdale County (~$2,600/yr) run highest — the statewide average above blends both ends. Private flood insurance is available in Tennessee alongside the NFIP, giving buyers outside a mandatory-purchase zone a second option for coverage. 41,000 NFIP policies are currently in force statewide.

Tornadoes — Tennessee averages 32 tornadoes/year; Nashville 2020 and 2023 outbreaks caused major damage are a narrow, high-severity damage path rather than a broad one — insurers price it as a probability-weighted catastrophe even though any single property's odds of a direct hit are low. Flooding — Cumberland, Tennessee, and Mississippi river systems; Nashville 2010 flood a benchmark event is typically excluded from a standard homeowners policy outright, which is why NFIP or private flood coverage is a separate line item, not folded into the premium above. Severe hailstorms — Middle Tennessee in hail belt are a frequency risk: common enough in an ordinary year to move the loss-ratio math at every renewal, not just after a single storm. Ice storms — eastern Tennessee mountains are a seasonal claim pattern — frozen pipes and ice damming are common enough that insurers build the expected cost into every renewal rather than treating a hard winter as a one-off.

Rent vs. buy in Tennessee

The median asking rent in Tennessee is $1,450/mo, putting the statewide price-to-rent ratio at 18.0 — moderate — nashville is renter-neutral at ~25 ptr due to rapid price appreciation; memphis and chattanooga strongly favor buying. On the median-priced home, RealCostIQ's breakeven math puts the point where buying overtakes renting at 3.8 years of ownership, before accounting for any home-price appreciation. Nashville (25.2) and Memphis (9.4) sit far enough apart that the statewide ratio above is a poor stand-in for either one specifically.

Loan limits

The 2026 conforming loan limit for a single-unit home in Tennessee is $832,750 in standard counties, rising to $1,029,250 in the state's FHFA-designated high-cost areas. A loan above the applicable limit is a jumbo loan, which typically carries stricter underwriting and a different rate. A buyer financing the statewide median home at 20% down borrows only about $250,835 — comfortably under the limit, with $581,915 of headroom before jumbo underwriting would apply.

Down payment assistance

Tennessee's primary down payment assistance program is Great Choice Plus DPA, administered by Tennessee Housing Development Agency (THDA). It offers up to $7,500 as a deferred-payment loan, for buyers under 80% of area median income on homes up to $481,176 — comfortably above Tennessee's own median home price, so the cap isn't the binding constraint for a typical buyer here. 1 additional program exists statewide: Hardest Hit Fund (HHF) Targeted Areas (up to $15,000, a forgivable loan). Local programs can generally be stacked with the state program, so a buyer isn't limited to one source of assistance.

First-time buyer mortgage programs

Beyond down payment assistance, Tennessee first-time buyers can also use Great Choice Home Loan, run by Tennessee Housing Development Agency (THDA): 30-year fixed-rate FHA, VA, USDA, or conventional mortgage at competitive rates. It covers loans up to $832,750 with as little as 3% down, for household incomes up to $125,000 depending on household size and county. Eligibility requirement: must not have owned a primary residence in the past 3 years; minimum 640 credit score. Available through THDA-approved lenders statewide; homebuyer education required. A second program, Great Choice Plus Down Payment Assistance (Tennessee Housing Development Agency (THDA)), covers deferred second mortgage — 0% interest, no monthly payments, up to $7,500 in assistance. $7,500 for down payment and/or closing costs; must be paired with Great Choice first mortgage.

Beyond PITI: what else the payment doesn’t cover

Isolate just the mortgage — principal and interest, nothing else — and the payment on Tennessee's median-priced home is $1,567/mo. The number a buyer should actually budget to is $2,486/mo, nearly half again on top of the mortgage payment (59% higher). The single biggest add-on in Tennessee is maintenance reserves, at $392/mo — ahead of every other non-mortgage line item in the true-cost breakdown, tax and insurance included. Utilities is the runner-up at $210/mo — the two together are the main reason the true-cost figure runs so far above the mortgage-alone number.

PITI is not the full cost of owning. RealCostIQ's true-monthly model adds $392/mo — $4,703/yr — in maintenance reserves (1.5% of home value annually — high humidity in summer drives mold growth and HVAC wear across most of the state; tornado risk requires periodic inspection of roofing, windows, and structural connections), and $148/mo in electricity plus $62/mo in gas ($210/mo total, per the U.S. Energy Information Administration — TVA power keeps electric rates below Southeast average). Combined, that pushes the true monthly cost of the median home to $2,486 — true monthly cost is 59% higher than mortgage alone — low property tax keeps hidden costs modest. That reserve isn't arbitrary: a typical HVAC system here runs 12-16 years (hot humid summers drive heavy cooling load; heat pumps common), and a typical roof runs 20-25 years (tornado and hail risk are primary concerns; impact-resistant shingles recommended), per Fannie Mae 1-2% guideline; Bankrate Hidden Costs Study 2025 — both figures already price in Tennessee's own climate rather than a national average. The 1.5% reserve rate is sized to replace both on that state-specific schedule, without a special assessment or a credit-card repair. HOAs in Tennessee are governed by Tennessee Horizontal Property Act and Common Interest Community Act (TCA Title 66, Chapter 27), which does not mandate a reserve fund; the main cost drivers are Nashville metro growth communities, Smoky Mountain resort condos, new construction prevalence in suburbs.

See the full Tennessee homebuyer resource page for property tax by county, first-time buyer programs, and utility costs, or compare payments across all eight price points.