‘Hidden’ housing costs rival the mortgage itself in some U.S. metros
- Property taxes and homeowners insurance account for an average of 21% of monthly mortgage payments across U.S. metro areas
- Five of the top 10 highest-burden metros are in Florida and Illinois
- Despite high home prices, Honolulu ranks lowest, with taxes and insurance comprising just 9% of monthly mortgage payments
COLUMBIA, Mo., March 4, 2026 /PRNewswire/ — Property taxes and homeowners insurance are making up a growing share of monthly housing costs across the U.S., according to a new report from Neighbors Bank released today. While home prices and mortgage rates often dominate affordability discussions, property taxes and insurance comprise an average of 21% of monthly mortgage payments, quietly adding hundreds or even thousands of dollars to a homeowner’s monthly bill.
The analysis, The ‘Hidden’ Costs Causing Monthly Housing Payments To Rise, examined nearly 450 U.S. metros using recent home values, property tax data and homeowners insurance premiums to calculate the average monthly payment on a 30-year fixed-rate mortgage at a 6.59% interest rate.
“It’s important to look beyond the sticker price and understand how taxes and insurance will shape your monthly payment,” said Jake Vehige, president of mortgage lending at Neighbors Bank. “They’re recurring costs that need to be planned for from day one. Homebuyers who don’t account for them upfront can be caught off guard when their monthly payment is higher than expected or rises over time, and these costs can become burdensome for any homeowner as they increase.”
Where Taxes and Insurance Hit Homeowners Hardest
In the highest-cost property tax and insurance markets, non-mortgage costs can consume more than a third of the monthly payment, leaving less of a homeowner’s budget for paying down the loan.
Illinois and Florida account for a disproportionate number of these highest-burden metros, but for different reasons. In Illinois metros like Decatur, Peoria and Rockford, high property tax rates drive monthly payments up, even where home prices are moderate. In Florida metros such as Pensacola and Miami, rising homeowners insurance due to hurricane and flood risk creates outsized costs.
Top 10 Highest-Burden Markets
|
Rank |
Metro |
T&I Share of Avg. Monthly Housing Payment* |
Avg. Monthly P&I* |
Avg. Monthly T&I* |
Total Avg. Monthly Payment (PITI)* |
|
1 |
Pensacola-Ferry Pass-Brent, Fla. |
43.6 % |
$1,531 |
$1,183 |
$2,714 |
|
2 |
Decatur, Ill. |
37.4 % |
$598 |
$357 |
$955 |
|
3 |
Massena- Ogdensburg, N.Y. |
36.5 % |
$690 |
$397 |
$1,088 |
|
4 |
Peoria, Ill. |
35.7 % |
$823 |
$458 |
$1,281 |
|
5 |
Wichita Falls, Texas |
34.9 % |
$863 |
$462 |
$1,324 |
|
6 |
Elmira, N.Y. |
34.3 % |
$760 |
$398 |
$1,157 |
|
7 |
Miami-Fort Lauderdale-West Palm Beach, Fla. |
34.3 % |
$2,383 |
$1,244 |
$3,627 |
|
8 |
Corning, N.Y. |
34.0 % |
$818 |
$421 |
$1,239 |
|
9 |
Rockford, Ill. |
33.9 % |
$1,048 |
$537 |
$1,585 |
|
10 |
Pine Bluff, Ark. |
33.9 % |
$494 |
$253 |
$747 |
*T&I = Taxes and Insurance. P&I = Principal and Interest. PITI = Principal, Interest, Taxes and Insurance.
Where Taxes and Insurance Take the Smallest Slice of Payments
The analysis found that in some of the highest-cost housing markets, taxes and insurance make up a surprisingly small share of monthly mortgage payments. In Honolulu, taxes and insurance account for just 9% of the average monthly payment, due to Hawaii’s low property tax rates and relatively stable homeowners insurance. Unlike many states, Hawaii funds schools and public services through other revenue streams, keeping property taxes low even as home values remain high.
Other metros with relatively low non-mortgage costs include St. George, Utah; Grand Junction, Colo.; Provo, Utah and Flagstaff, Ariz. In these markets, lower property tax rates, newer housing stock and reduced climate-related insurance risk help keep monthly costs in check.
Top 10 Lowest-Burden Markets
|
Rank |
Metro |
T&I Share of Avg. Monthly Housing Payment* |
Avg. Monthly P&I* |
Avg. Monthly T&I* |
Total Avg. Monthly Payment (PITI)* |
|
1 |
Urban Honolulu, Hawaii |
9.0 % |
$4,243 |
$420 |
$4,663 |
|
2 |
Morehead City, N.C. |
9.0 % |
$2,358 |
$234 |
$2,592 |
|
3 |
St. George, Utah |
9.1 % |
$2,666 |
$268 |
$2,934 |
|
4 |
Heber, Utah |
9.2 % |
$5,672 |
$577 |
$6,249 |
|
5 |
Grand Junction, Colo. |
9.8 % |
$2,143 |
$233 |
$2,376 |
|
6 |
Provo-Orem-Lehi, Utah |
9.9 % |
$2,731 |
$298 |
$3,029 |
|
7 |
Flagstaff, Ariz. |
9.9 % |
$3,135 |
$344 |
$3,479 |
|
8 |
Sevierville, Tenn. |
9.9 % |
$1,991 |
$218 |
$2,209 |
|
9 |
Carson City, Nev. |
10.3 % |
$2,435 |
$280 |
$2,715 |
|
10 |
Myrtle Beach–Conway- North Myrtle Beach, S.C. |
10.3 % |
$1,691 |
$195 |
$1,886 |
*T&1 = Taxes and Insurance. P&I = Principal and Interest. PITI = Principal, Interest, Taxes and Insurance.
Rising Taxes and Insurance Can Surprise Homeowners Over Time
First-time buyers are more likely to use low down-payment loans such as FHA, USDA or VA programs, which typically require escrow accounts bundling taxes and insurance into the monthly mortgage payment rather than paying them annually. This means a fixed-rate mortgage does not guarantee a fixed monthly payment. Annual escrow reviews adjust payments if taxes or insurance rise and borrowers may also need to cover shortfalls from prior years.
“Many homeowners assume their payment will stay the same each year, but even if your mortgage rate doesn’t change, taxes and insurance often do,” Vehige said. “While you can’t control rising costs, reviewing your escrow statement for shortfalls, shopping for insurance annually and understanding how to appeal your property taxes can help prevent surprises and keep your budget on track.”
The full report, including city-by-city data and complete methodology, is available at: https://www.neighborsbank.com/learn/taxes-insurance-costs-reshaping-mortgage-affordability/
About Neighbors Bank
Founded in Clarence, Missouri, and with additional offices in Columbia, Missouri, Neighbors Bank financed more than $813 million in mortgage loans in 2025 and is the No.3 USDA lender in the nation, according to the 2025 United States Department of Agriculture rankings. The company’s vision is to make homebuying affordable, accessible and achievable.
NeighborsBank.com | 800-220-0600 | 3621 Discovery Parkway, Suite 115, Columbia, MO 65201. Member FDIC. NMLS #491986 (nmlsconsumeraccess.org) Equal Housing Lender.
Contact:
Janice McDill
janice@jmcdillcommunications.com
312.307.3134
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SOURCE Neighbors Bank
