Tennessee charges no state income tax, but the 0.66% average property tax rate keeps total housing costs competitive. This calculator uses Tennessee-specific defaults: $315,000 median home price, 0.66% property tax, and $1,750/year average insurance.
Last updated: March 13, 2026
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Monthly Payment (Tennessee)$0
Loan Details — Tennessee
Tennessee median: $315,000
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Below 20% triggers PMI on conventional loans
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Average 30-year fixed ~6.75% (March 2026)
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Tennessee average: 0.66%
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Tennessee average: $1,750/yr
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Property Tax
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Tennessee Metro Area Home Prices
Click a metro to load its median price into the calculator above.
Yearly Amortization Schedule+
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Tennessee's Tax Landscape and Your Mortgage
Tennessee is one of nine states with no state income tax. That extra take-home pay makes a real difference in mortgage qualifying — a household earning $150,000 keeps roughly $5,000-$10,000 more annually compared to states with 5-7% income tax rates. That translates to an additional $400-$800/month that lenders factor into your debt-to-income ratio.
At the state's median home price of $315,000, the $0.66% property tax rate adds $173/month to your mortgage payment. That's $2,079/year — below the national median of ~1.1%.
Property Taxes Across Tennessee
The 0.66% statewide average masks significant variation. Low property taxes combined with no income tax makes Tennessee very tax-friendly overall
Price ranges across the state: Nashville has a median of $430,000, while Memphis sits at $225,000 — a $205,000 gap that dramatically changes your monthly payment. At $0.66% property tax, that price difference alone means $113/month more in property tax in Nashville.
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Homebuyer Programs and Exemptions
Tennessee offers several programs for homebuyers:
THDA Great Choice Home Loan with competitive rates
Hardest Hit Fund down payment assistance up to $15,000
Homestead exemption: Property tax relief for seniors 65+ with income under $31,600; disabled veterans may receive full exemption
Tennessee-Specific Considerations
No state income tax (Hall Tax on investment income was fully repealed in 2021)
Low property taxes combined with no income tax makes Tennessee very tax-friendly overall
Nashville has experienced some of the strongest price appreciation in the nation since 2015
High combined sales tax (state 7% + local up to 2.75%) is the main revenue source
No local income taxes
Property tax rates vary significantly by county and municipality — Nashville metro (~0.7%) differs from rural Tennessee counties
Compare Tennessee Mortgage Rates
See personalized rates from Tennessee lenders. LendingTree matches you with up to 5 offers so you can compare and save.
0.39% property tax, 5% top rate. Median home: $232,500.
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1.04% property tax, no income tax. Median home: $340,000.
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0.62% property tax, 2.5% top rate. Median home: $395,000.
Frequently Asked Questions
What is the average property tax rate in Tennessee?
The average effective property tax rate in Tennessee is 0.66%. On a $315,000 home (the state median), that works out to approximately $2,079/year or $173/month added to your mortgage payment. Property tax rates vary by county and school district within Tennessee — always check your specific jurisdiction's rate. Homestead exemption: Property tax relief for seniors 65+ with income under $31,600; disabled veterans may receive full exemption
How much does homeowners insurance cost in Tennessee?
The average annual homeowners insurance premium in Tennessee is approximately $1,750 ($146/month). This is near the national average of approximately $1,500/year. Actual premiums depend on your home's location, age, construction type, and coverage limits.
What first-time homebuyer programs are available in Tennessee?
THDA Great Choice Home Loan with competitive rates. Hardest Hit Fund down payment assistance up to $15,000. These programs typically have income limits, purchase price caps, and may require homebuyer education courses. Check the Tennessee housing finance agency website for current eligibility requirements and application deadlines.
How does Tennessee's lack of income tax affect home buying?
Tennessee has no state income tax, which means more of your gross income is available for mortgage payments. On a $150,000 salary, you keep roughly $5,000-$10,000 more per year compared to states with 5-7% income tax rates. Combined with Tennessee's 0.66% property tax rate, total housing costs remain competitive.
What is the conforming loan limit in Tennessee?
The 2026 conforming loan limit in Tennessee is $806,500. Loans above this amount are considered jumbo loans and typically carry higher interest rates (0.25-0.5% premium), require larger down payments (10-20%), and have stricter qualification requirements including higher credit scores (700+) and lower debt-to-income ratios.
This calculator is for educational purposes. Tax rates and insurance costs are based on Tennessee state averages and may not reflect your specific county, school district, or municipality. Consult a financial professional for advice specific to your situation.