With a 4.25% top income tax rate and 1.38% property tax, Michigan homeowners face a moderate combined tax burden. This calculator is pre-filled with Michigan numbers: $240,000 median price, 1.38% property tax, $1,500/year insurance.
Last updated: March 13, 2026
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Monthly Payment (Michigan)$0
Loan Details — Michigan
Michigan median: $240,000
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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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Michigan average: 1.38%
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Michigan average: $1,500/yr
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Property Tax
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Michigan Metro Area Home Prices
Click a metro to load its median price into the calculator above.
Yearly Amortization Schedule+
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Michigan's Tax Landscape and Your Mortgage
Michigan levies a flat 4.25% income tax on all taxable income. A household earning $150,000 pays approximately $4,781 in state income tax, which reduces the amount available for monthly mortgage payments by roughly $398/month.
At the state's median home price of $240,000, the $1.38% property tax rate adds $276/month to your mortgage payment. That's $3,312/year — well above the national median of ~1.1%.
Property Taxes Across Michigan
The 1.38% statewide average masks significant variation. High property tax rates but PRE exemption significantly reduces burden for owner-occupants
Price ranges across the state: Detroit metro has a median of $265,000, while Detroit metro sits at $265,000 — a $0 gap that dramatically changes your monthly payment. At $1.38% property tax, that price difference alone means $0/month more in property tax in Detroit metro.
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Homebuyer Programs and Exemptions
Michigan offers several programs for homebuyers:
MSHDA MI Home Loan with down payment assistance up to $10,000
MI 10K DPA program for specific zip codes
Homestead exemption: Principal Residence Exemption (PRE) exempts homeowners from 18-mill school operating tax — worth roughly 40% reduction in property taxes
Michigan-Specific Considerations
High property tax rates but PRE exemption significantly reduces burden for owner-occupants
Extremely affordable housing in many areas outside metro Detroit and Ann Arbor
Some cities (Detroit, Grand Rapids) levy additional city income tax (1-2.4%)
Auto insurance costs are among the highest in the nation (separate from home)
Property tax rates vary significantly by county and township — Detroit metro rates differ substantially from outstate Michigan
Compare Michigan Mortgage Rates
See personalized rates from Michigan 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.
Alaska Mortgage Calculator
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1.04% property tax, no income tax. Median home: $340,000.
Arizona Mortgage Calculator
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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 Michigan?
The average effective property tax rate in Michigan is 1.38%. On a $240,000 home (the state median), that works out to approximately $3,312/year or $276/month added to your mortgage payment. Property tax rates vary by county and school district within Michigan — always check your specific jurisdiction's rate. Homestead exemption: Principal Residence Exemption (PRE) exempts homeowners from 18-mill school operating tax — worth roughly 40% reduction in property taxes
How much does homeowners insurance cost in Michigan?
The average annual homeowners insurance premium in Michigan is approximately $1,500 ($125/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 Michigan?
MSHDA MI Home Loan with down payment assistance up to $10,000. MI 10K DPA program for specific zip codes. These programs typically have income limits, purchase price caps, and may require homebuyer education courses. Check the Michigan housing finance agency website for current eligibility requirements and application deadlines.
How does Michigan's 4.25% income tax affect home affordability?
Michigan's top income tax rate of 4.25% reduces your take-home pay, which affects how much mortgage you can comfortably carry. On a $150,000 salary, state income tax takes roughly $4,144-$5,419/year (effective rate is lower than the top marginal rate). Combined with 1.38% property tax, the total tax burden in Michigan is above average. Use our paycheck calculator to see your exact take-home pay.
What is the conforming loan limit in Michigan?
The 2026 conforming loan limit in Michigan 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 Michigan state averages and may not reflect your specific county, school district, or municipality. Consult a financial professional for advice specific to your situation.