Mortgage Calculator in Alabama

Calculate your monthly mortgage payment in Alabama using the 2026 median home price of $225K and current local rates. Adjust the inputs below to match your situation.

Alabama Housing Market at a Glance (2026)

$225K

Median Home Price

6.85%

Avg Mortgage Rate

0.41%

Property Tax Rate

10%

Typical Down Payment

Buying a Home in Alabama: Costs to Know

Average closing costs1.7% of purchase price

On a $225K home, closing costs ≈$3,825

Median household income$54,000/yr

State income tax (top rate)5%

First-Time Buyer Programs in Alabama

Alabama offers state-sponsored programs that can reduce your down payment or closing costs:

✓Step Up
✓Affordable Income Subsidy Grant

How Mortgage Payments Work in Alabama

A standard mortgage payment in Alabama is calculated using the amortization formula:M = P[r(1+r)^n] / [(1+r)^n - 1]

Where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. On a $225K home in Alabama with a 10% down payment at 6.85% over 30 years, your principal and interest payment comes to approximately $1,327/month— not including property taxes or homeowner's insurance.

Alabama's property tax rate of 0.41% adds roughly $77/month to your total housing cost on a $225K home. This rate is below the national average of ~1.1%, which helps keep total housing costs lower.

Alabama vs. National Average

Metric	Alabama	National Avg
Median Home Price	$225,000	$420,000
Property Tax Rate	0.41%	1.07%
Avg Mortgage Rate	6.85%	6.85%
Cost of Living Index	87	100

Frequently Asked Questions — Mortgage Calculator in Alabama

What is the average mortgage payment in Alabama?+

Based on the median home price of $225K in Alabama with a 10% down payment and 6.85% rate (30-year fixed), the estimated monthly principal and interest payment is approximately $1,327. Adding property taxes (~$77/mo) and homeowner's insurance, total PITI is typically $1,554–$1,654/month.

What is the property tax rate in Alabama?+

Alabama has an average effective property tax rate of 0.41%. On the median home price of $225K, that equals roughly $923 per year — or $77 added to your monthly mortgage payment. This is below the national average of ~1.1%, which helps lower total housing costs in Alabama.

How much down payment do I need to buy a home in Alabama?+

The typical down payment in Alabama is 10% — about $22,500 on the median $225K home. Conventional loans require as little as 3% down; FHA loans allow 3.5%. First-time buyers may also qualify for assistance through programs like Step Up.

What are closing costs in Alabama?+

Average closing costs in Alabama are approximately 1.7% of the purchase price — about $3,825 on the median $225K home. Closing costs include lender origination fees, title insurance, escrow, prepaid interest, and government recording fees.

What income do I need to afford the median home in Alabama?+

To afford the $225K median home in Alabama under the 28% housing-cost rule, you need a gross monthly income of at least $5,550 — roughly $67K/year. The median household income in Alabama is $54,000.

Data Sources & Methodology

State data sourced from the National Association of Realtors (median home prices), Tax Foundation (property tax rates, income tax), Freddie Mac PMMS (mortgage rates), ATTOM Data Solutions (closing costs), and U.S. Census Bureau ACS (household income). Last updated 2026.