Property taxes and home insurance now make up roughly a quarter of the monthly cost of buying a typical U.S. home. DataPorium's Zillow-based payment series shows a total monthly payment of $2,473 for the typical home with 20% down in July 2026, of which $1,870 was principal and interest and $603, or 24.4%, was taxes and insurance [4]. Property insurance alone averaged $209 a month, a record 9.6% of the average mortgage payment, in the second quarter of 2026, up 8.7% from a year earlier and nearly 80% since the start of 2020, according to ICE Mortgage Technology [1]. Effective property tax rates range from 0.28% of home value in Hawaii to 2.38% in New Jersey [3].
How big property taxes and home insurance are in the monthly payment
Most buyers budget for the loan and treat everything else as small print. The data say otherwise. DataPorium's series adds taxes and insurance to principal and interest for the typical home, valued at $370,079 in July 2026 [4]:
| Down payment (July 2026, typical U.S. home) | Principal and interest | Total payment with taxes and insurance | Taxes and insurance share |
|---|---|---|---|
| 20% down | $1,870 | $2,473 | 24.4% |
| 10% down | $2,380 | $2,983 | 20.2% |
| 5% down | $2,512 | $3,115 | 19.3% |
The $603 of taxes and insurance is the same in every row because it depends on the home, not the loan. That is the key difference from the mortgage payment: a buyer can shrink the loan with a larger down payment or wait for lower rates, but the tax and insurance bill follows the property and tends to rise with assessments and premiums. On a $370,000 home, taxes and insurance of $603 a month equal about $7,240 a year, or 2.0% of the home's value every year.
Home insurance: $209 a month and a record share of the payment
ICE's September 2026 Mortgage Monitor reports that the average property insurance payment reached $209 a month in the second quarter, 9.6% of the average mortgage payment [1]. The annual increase of 8.7% came mostly from higher coverage limits (up 5.5%) rather than higher rates per dollar of coverage (up 3%), because home values and rebuilding costs have risen [1]. The quarterly rise of 1.8% was the smallest since ICE began tracking the metric, a sign that the fastest premium growth may be past [1].
Where insurance costs the most
The burden varies enormously by market. Insurance takes 24.3% of the average mortgage payment in New Orleans but only 4.3% in San Jose [1]. Among the fastest annual increases, ICE lists Greenville, South Carolina at 15.8%, Honolulu at 14.7%, Minneapolis at 13.1% and Sacramento and San Diego at about 12% [1]. Freddie Mac's research, using 2023 data, found the average premium at $1,522 a year, up 40.8% from $1,081 in 2018 and 10.8% in a single year; borrowers in Louisiana, Oklahoma, Kansas, Nebraska and Mississippi paid more than $8 per $1,000 of home value, against less than $2.50 in California, Washington, Nevada, Oregon, Utah and the District of Columbia [2]. Nationally, insurance consumed 1.64% of borrower income in 2023, up from 1.49% in 2018, and 3.1% for very low-income borrowers [2].
One finding from ICE points to what households can do: borrowers who switched insurers cut their premiums by 6.6% on average, about $440 a year, while those who stayed saw increases of 10.4% [1]. Competition among insurers works when policyholders use it.
Property taxes: 0.28% in Hawaii to 2.38% in New Jersey
Property taxes are the larger of the two items in most states and the most variable. The Tax Foundation's ranking of effective rates on owner-occupied housing puts New Jersey highest at 2.38%, followed by Illinois at 2.32%, New Hampshire at 2.15% and Connecticut at 1.98%; Hawaii is lowest at 0.28%, then Alabama at 0.43%, Louisiana at 0.51% and Delaware at 0.55% [3]. Property taxes supplied 28.9% of all state and local tax revenue in fiscal year 2023, more than any other tax [6].
Applied to the typical home value of $370,079, the spread is stark: about $86 a month in Hawaii, $308 a month at a 1.0% rate, and $734 a month in New Jersey [3][4]. Within a single state the range is wider still. DataPorium's property tax data for Bergen County, New Jersey shows effective rates of 0.77% in Alpine, 1.55% in Paramus, 2.48% in Fort Lee, 2.80% in Hackensack, 3.36% in Bergenfield and 4.23% in Bogota, so two homes of equal value a few miles apart can differ by more than $1,000 a month in taxes [4]. Buyers can look up rates by state, county, city or ZIP code on DataPorium's housing market page.
Taxes and insurance add about $603 a month to the typical home in 2026, a quarter of the total payment, and unlike the mortgage they do not fall when rates do.
What rising escrow costs mean for buyers and investors
- Affordability: a buyer qualified on principal and interest alone at 28% of income needs about 9 percentage points more income to cover $603 of taxes and insurance at the same ratio.
- Price effects: because tax and insurance costs are capitalized into prices, markets with high or rising costs (Gulf Coast insurance, Northeast taxes) face a headwind on values that lower mortgage rates do not remove.
- Escrow shock: annual escrow reviews pass through premium and assessment increases, so a fixed-rate mortgage does not mean a fixed payment.
- Rentals: landlords pass higher taxes and premiums to tenants where the market allows, which supports rents but compresses margins where it does not.
Zillow's August report puts the typical U.S. home at $369,678, essentially unchanged from July, so the growth in ownership costs this year has come from taxes and insurance rather than from prices [5]. The market-oriented reading is that high property taxes are the price of local spending choices and that insurance costs reflect real rebuilding risk; both respond to competition and to restraint in local budgets, not to caps that shift costs elsewhere. The counterpoint is that assessments lag prices, so tax bills can keep rising even after values flatten. Investors may consider that after-tax, after-insurance yield, not gross rent, is the number that determines whether a property pays.
Key takeaways
- Taxes and insurance were $603 a month, 24.4% of the $2,473 total payment on the typical U.S. home with 20% down in July 2026 [4].
- Property insurance averaged a record $209 a month, 9.6% of the mortgage payment, up 8.7% in a year and nearly 80% since early 2020 [1].
- Insurance takes 24.3% of the payment in New Orleans but 4.3% in San Jose; switching insurers saved 6.6% on average [1].
- Effective property tax rates run from 0.28% in Hawaii to 2.38% in New Jersey, and vary by more than five to one within Bergen County, NJ [3][4].
- The average premium rose 40.8% from 2018 to 2023 to $1,522, according to Freddie Mac [2].
Frequently asked questions
How much of a mortgage payment is taxes and insurance?
About a quarter for a typical home bought with 20% down: DataPorium's Zillow-based series shows $603 of taxes and insurance in a $2,473 total monthly payment in July 2026 [4].
How much is homeowners insurance per month in 2026?
ICE reports an average property insurance payment of $209 a month in the second quarter of 2026, 9.6% of the average mortgage payment and 8.7% higher than a year earlier [1].
Which state has the highest property taxes?
New Jersey, with an effective rate of 2.38% of home value on owner-occupied housing, followed by Illinois at 2.32%; Hawaii is lowest at 0.28% [3].
Why did my escrow payment go up in 2026?
Escrow payments track property tax assessments and insurance premiums, and insurance costs rose 8.7% over the year to mid-2026 while home values, which drive assessments, were still slightly higher than a year earlier [1][5].
Sources & References
- [1] ICE Mortgage Monitor, September 2026
- [2] Freddie Mac Research: The Cost of Homeowners' Insurance
- [3] Tax Foundation: How High Are Property Taxes in Your State?
- [4] DataPorium Housing Market Insights (Zillow-based data by state, metro, city and ZIP)
- [5] Zillow August 2026 Market Report (press release, September 8, 2026)
- [6] Tax Foundation: Property Taxes by State and County, 2026
