How Much is the Average Mortgage in California?
May 13, 2025
California's housing market has long been one of the most expensive in the United States, and in 2025, the cost of homeownership continues to rise. With high home prices, elevated mortgage rates, and large regional differences, understanding the average mortgage in California requires that we take a closer look at the factors influencing monthly payments.
Average Monthly Mortgage Payments in California
As of early 2025, the average monthly mortgage payment for a median-priced home in California ranges between $3,500 and $4,000, assuming a 20% down payment and a 30-year fixed-rate mortgage. This estimate includes principal, interest, property taxes, and homeowners' insurance.
However, this average varies across different regions:
- San Jose: Around $7,162 per month
- San Francisco: Around $5,500 per month
- Los Angeles: Around $4,200 per month
- San Diego: Around $4,000 per month
- Sacramento: Around $3,000 per month
- Fresno: Around $2,200 per month
As you can see, there are major differences in mortgage payments depending on your location within California.
Related: The Impact of California Regulations on Mobile Home Loans
So why are these prices so high? Several factors contribute to the mortgage payments in California:
1. Home Prices
The median home price in California is approximately $800,000, much higher than the national median. This elevated cost means larger loan amounts and, of course, higher monthly payments.
2. Property Taxes & Insurance
California's average property tax rate is approximately 1.1% of the home's assessed value. And homeowners' insurance premiums can vary based on location, home value, and coverage levels, which also impacts monthly mortgage payments.
3. Affordability
The high cost of mortgages in California can make affordability very challenging.
- Income Requirements: To afford a mid-tier home with a monthly payment of $5,900, a household would need an annual income of about $234,000, which is more than twice the state's median household income.
- Comparison to Renting: In many areas, monthly mortgage payments far exceed rental costs. For example, purchasing a two-bedroom home may cost about $1,960 more per month than renting a similar property.
Increase Down Payment: A larger down payment reduces the loan amount, leading to lower monthly payments and potentially eliminating the need for private mortgage insurance (PMI).
Explore Different Loan Terms: While 30-year fixed mortgages offer lower monthly payments, 15- or 20-year loans can save money on interest over time.
Shop Around for Rates: Different lenders offer varying interest rates and terms. Comparing multiple offers can lead to better mortgage deals.
Consider Location Flexibility: Exploring homes in less expensive regions or suburbs can significantly reduce mortgage payments.
The average mortgage in California is notably higher than the national average, driven by steep home prices and substantial regional differences. Prospective homebuyers should carefully assess their financial situation, explore their loan options, and consider location flexibility to effectively navigate the state's challenging housing market.
And for Californians seeking more affordable paths to homeownership, manufactured homes might offer an interesting alternative. With prices significantly lower than traditional homes, manufactured homes can drastically reduce your monthly mortgage payments, often costing under $2,000, even in more expensive regions.
These homes are built to federal HUD standards, making them durable, energy-efficient, and suitable for long-term living. Whether placed in a land-lease community or on privately owned land, manufactured homes provide an opportunity to own property in California without the financial burden of a high six-figure mortgage.