Minnesota Mortgage Calculator: Estimate Your Monthly Payment
Updated: January 18, 2024
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Minnesota homeowners spend around $76 less every month on a mortgage payment than the national average. However, consider the real estate tax and your budget before purchasing a property in this state. Minnesota's real estate tax rate is 1.12%; the average yearly property tax is $2,429, the 32nd lowest in the United States. Learn more about Minnesota property taxes through the Department of Revenue.
You get a tailored estimate and can change elements according to your circumstances and budget, such as down payment and loan term, using MoneyGeek's Minnesota state mortgage calculator. When you know what you should roughly pay for a mortgage per month, as the calculator breaks down, it is simpler to compare offers from various lenders and select the best option for you.
This guide explains why and how to use our mortgage calculator and how to save money on your monthly mortgage payment in Minnesota. We also provide tips for what to do next when you’re ready to pursue a home purchase.
Start Here: Plug In Your Mortgage Factors
The MoneyGeek Minnesota mortgage calculator provides a comprehensive estimate of your monthly mortgage payment, taking into account 12 different variables. If you're not sure what each factor means, there are descriptions below.
Why and How to Use Our Mortgage Calculator
Minnesota's average house value is $239,900. Our mortgage calculator can help you determine a budget for your prospective house and whether you want to spend more or less. MoneyGeek's Minnesota mortgage calculator considers a variety of factors to see how each affects your mortgage payment. That way, you may be able to identify the specific expenses you can save on.
When you use our mortgage calculator, you can decide on the home loan amount you can afford, the best mortgage term for your budget, and see the total cost of paying back principal and interest for the loan. To see the cost of buying a house in Minnesota and having a mortgage, you need to fill in the following or know what some of the below terms mean.
Home Price:
Put the maximum price you can afford or the loan amount you're interested in in this box.
Down Payment:
You can specify a percentage of the purchase price or a dollar amount for your initial up-front payment.
Interest Rate:
Input the interest rate for the loan. MoneyGeek publishes daily mortgage rate data from several lenders to help you find the best rate.
Loan Terms:
The most common loan periods are 15 or 30 years; however, you have the option of choosing a different term length.
Payments per Year:
The most usual mortgage payment is monthly or 12 payments per year.
Property Tax:
You can enter Minnesota's average yearly property tax of $2,429 under "Other costs."
HOA Fees:
If your house has a homeowners association, you have to pay annual or monthly fees (HOA). Enter the amount if you know it.
Principal & Interest:
The principal refers to the amount borrowed from a lender to purchase your property. For the money you borrowed, you must pay interest to the lender.
Monthly Payment:
Principal and interest, property taxes, home insurance and HOA fees are part of your monthly payment.
Principal Payment:
It's a part of your monthly mortgage payment that goes toward paying down your loan balance.
Interest Payment:
It covers the interest cost the lender charges you for the loan.
Total Cost With Interest:
The total cost of a mortgage loan is the amount of principal you pay back and the interest charges you pay for the entire loan term.
There are various strategies to reduce your mortgage payment in Minnesota to save money on your monthly costs. Here are some of them.
- Buy a cheaper house. Your monthly mortgage payment becomes more reasonable when you take out a smaller loan.
- Change location. Minnesota has the 32nd lowest real estate tax rate in the United States at 1.12%, with an average annual property tax of $2,429. If feasible, you can try looking into other states. Or, consider a different area of Minnesota as rates may vary by city.
- Make a bigger down payment. If you can pay a larger down payment, you may be able to lower your interest rate — which decreases your monthly payment.
- Extend your loan term. You pay more interest in the long run, but your monthly payment is less if you have, for example, a 30-year loan vs. a 15-year loan.
Next Steps: What To Do After You Have Estimated Your Mortgage Payments
The home-buying process might be complicated, but MoneyGeek has compiled valuable guides to assist you.
- Shop & Compare Rates - Before taking out a loan, it's critical to compare offers from multiple mortgage lenders. For additional information, see our Minnesota mortgage rates page.
- Not Ready To Buy? - If you're on the fence about whether to rent or buy a home in Minnesota, there are many things to consider.
- Learn More - Are you unsure what form of mortgage you require? MoneyGeek researched reverse mortgages, VA loans and FHA loans so you can learn more about mortgage types.
Frequently Asked Questions About Mortgages in Minnesota
It depends on how much money you have available to spend on your monthly mortgage payment without financial hardship. Mortgage lenders use the debt-to-income (DTI) ratio to measure affordability. If your DTI is 43% or below, they consider your home loan affordable.
In Minnesota, the average outstanding mortgage balance is $175,374.
You need a down payment of around 5% for some mortgage programs. Meanwhile, other government-sponsored programs, such as those given by the VA and the USDA, may not need a down payment. But, for a conventional mortgage, 20% is the requirement to avoid private mortgage insurance (PMI).
If you put less than 20% down on a conventional or non-government loan, lenders usually require private mortgage insurance (PMI). You may be eligible to remove PMI if you refinance when you reach 20% equity in the home.
Minnesota’s average yearly property tax is $2,429, making it the 32nd lowest in the United States.
Minnesota homeowners make an average monthly mortgage payment of $1,083, which is $76 cheaper than the national average.
In Minnesota, the median home price is $239,900.
sources
- Department of Revenue. "Minnesota Department of Reven." Accessed March 2, 2022.