Neighbors Bank: Taxes, Insurance Average 21% of Homeowners’ Monthly Payments

(Image courtesy of Brent Singleton/pexels.com)

Neighbors Bank, Columbia, Mo., released a new study finding that property taxes and homeowners insurance account for an average of 21% of monthly mortgage payments across U.S. metro areas.

Some areas see higher shares of their payments taken up by taxes and insurance than others. At the top of the list is Pensacola-Ferry Pass-Brent, Fla., where taxes and insurance take up 43.6%. Next is Decatur, Ill., at 37.4%, Massena-Ogdensburg, N.Y., at 36.5%, Peoria, Ill., at 35.7% and Wichita Falls, Texas, at 34.9%.

Rounding out the top 10 are Elmira, N.Y., Miami-Fort Lauderdale-West Palm Beach, Fla., Corning, N.Y., Rockford, Ill., and Pine Bluff, Ark.

Illinois sees a number of locales on the list due to its higher property taxes combined with moderate home prices, Neighbors pointed out. In Florida, it’s more likely to be insurance prices driving up costs.

On the other hand, urban Honolulu and Morehead City, N.C., see the smallest percentage of an average monthly payment taken up by taxes and insurance, both at 9%. Next is St. George, Utah, at 9.1%, Heber, Utah, at 9.2%, and Grand Junction, Colo., at 9.8%.

Rounding out the bottom 10 are Provo-Orem-Lehi, Utah, Flagstaff, Ariz., Sevierville, Tenn., Carson City, Nev., and Myrtle Beach-Conway-North Myrtle Beach, S.C.

For the Western metros on the list, Neighbors Bank pointed to lower property taxes, newer housing stock and lower climate-related risk as factors.  

“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.”