Since the Federal Reserve cut interest rates by a quarter-point last month, anticipation of a real estate rebound has been growing. Mortgage applications rose 29.7% ahead of the rate cut announcement, and climbed again the following week by 0.6%, according to the Mortgage Bankers Association.
The average 30-year mortgage rate now sits at 6.3%. Compared to two years ago, when the average rate was 7.19%, this is a welcome improvement for affordability.
As a result, average monthly mortgage payments are more affordable than they once were. In some cases, prospective homebuyers stand to save thousands of dollars annually compared to two years ago.
To find where mortgage payments dropped the most since September 2023, Zoocasa analyzed average monthly mortgage payments in 100 cities. The calculations are based on the median-priced single-family home with a 20% down payment, a 30-year mortgage term, and a fixed rate of 6.3% in September 2025 compared to 7.19% in September 2023.
Annual Mortgage Payments Are Over $1,000 Lower Than in 2023
In 66 cities, the average monthly mortgage payment is lower today than it was two years ago. In some cities, mortgage shoppers will pay $1,000 less than in 2023, while in other cities, they’ll save over $2,000 in mortgage expenses.
North Port-Sarasota tops the list for having the largest decrease in the average mortgage payment. Homebuyers will pay nearly $7,000 less in annual mortgage expenses today than if they had bought a median-priced home in September 2023.
Similarly, in Cape Coral-Fort Myers, Durham-Chapel Hill, and Denver, average annual mortgage expenses are at least $4,000 lower than in 2023.
Texas homebuyers are also benefiting from much lower mortgage rates. In Austin, the average monthly mortgage payment decreased by $262, while in Dallas, it dropped by $220. Houston’s average mortgage payment didn’t drop by quite as much, just $159, but that still equals nearly $2,000 in annual savings for buyers.
Buyers in Expensive Markets See Little to No Mortgage Relief
Even as borrowing costs decrease, average mortgage payments can still rise if the price of a home has increased substantially. This is the case in many of America’s most expensive housing markets, where home price growth has been rapid and, as a result, pushed mortgage expenses up with it.
San Jose’s mortgage expense increase is particularly notable. In just two years, the annual average mortgage expense has increased by $9,865. Every month, that equals an extra $822 spent on mortgage costs.
No other city comes close to San Jose, though. New York’s monthly mortgage costs increased by $335, Bridgeport’s by $267, and Providence’s by $170. That amounts to an extra $2,000-$4,000 per year in those cities, but is still a far cry from San Jose’s nearly $10,000 increase.
Boston and Los Angeles, two of the most expensive cities for homebuyers, saw monthly increases of $146 and $75, respectively. Those increases came after the median single-family home price rose by nearly $100,000 since 2023. The median home price in Boston and Los Angeles is now over $800,000, according to the National Association of Realtors.
But not all high-cost-of-living cities saw mortgage payments increase. San Francisco’s average monthly mortgage payment dropped by $181, Seattle’s by $174, and Miami’s by $83.
Here’s Where You Can Find the Lowest Mortgage Payments
At $1,031, Toledo, OH, takes the crown for having the lowest average monthly mortgage payment. Little Rock and Akron are not far behind, though, with average monthly mortgage payments of $1,117 and $1,131, respectively.
Average monthly mortgage payments below $1,500 are mostly limited to the Rust Belt, including cities such as Buffalo, Pittsburgh, and Detroit. However, some southern cities also stand out for their affordable mortgage payments, like Oklahoma City ($1,335), Jackson ($1,308), and Baton Rouge ($1,358).
Though the Northeast is home to many of the largest annual increases in mortgage payments, there are some regional outliers. Average mortgage payments in Upstate New York remain affordable, with monthly payments ranging from $1,200 to $1,700. In contrast, parts of Pennsylvania, such as Harrisburg and Lancaster, have monthly payments below $1,800.
Every Dollar Counts When it Comes to Housing Costs
With newly originated mortgage debt totaling $458 billion in the second quarter of 2025, every dollar counts when it comes to saving on housing expenses.
Generally, if prospective homebuyers want to find the lowest mortgage payments, they need to look in cities with the lowest home prices. But that’s not the only way homebuyers can save money on mortgage costs.
Using a larger down payment can also lower monthly mortgage payments. This is because the bigger the down payment, the less money you’ll need to borrow. You may also be able to secure a more advantageous interest rate if lenders think you’re more financially stable.
Additionally, prospective buyers should consider whether an adjustable-rate mortgage (ARM) is right for them. Depending on current market conditions, the amount you pay with an ARM may fluctuate. If you’re able to tolerate some risk, an ARM may provide you with a lower interest rate.
Are you thinking about buying a home this year? Start your search with Zoocasa today! From mortgages to closing costs, our agents can help you navigate the entire home-buying process.
