Summary: Using current median home prices and average interest rates, the average monthly mortgage payment among Los Angles home buyers would likely come to around $4,045 as of summer 2018.
Home prices in Los Angeles, California have risen steadily over the last couple of years. As a result, the average mortgage payment among homeowners has also risen. How much might your mortgage payment be, if you purchased a median-priced home in Los Angeles with current rates? It would likely be somewhere around $4,045 per month, based on the calculations below.
Determining the Average Mortgage Payment in Los Angeles
Note: All of the figures below (mortgage rates, home prices, etc.) were current as of summer 2018. Those figures will change over time. So this analysis gives us some insight into the average mortgage payment for recent home buyers in Los Angeles, during late summer / early fall of 2018.
To figure out what the average monthly payment might look like in L.A., we need to round up some figures:
- Down payments: According to recent reports from ATTOM Data Solutions, the median down payment among home buyers nationwide is somewhere around 7%. Some borrowers choose to put down 20% or more, in order to avoid paying mortgage insurance, while others aim for low-down-payment programs in the 3% range. But the median or midpoint is around 7%.
- Home prices: According to Zillow, the median home value for Los Angeles, California was $677,400 as of July 2018. House prices are higher now than they were last year, due to steady appreciation within the Los Angeles market. So the average down payment has risen as well. We’ve used $677,400 as a starting figure.
- Mortgage rates: According to the long-running industry survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage loan was 4.54% at the end of July 2018. The 30-year fixed home loan is by far the most popular mortgage type among home buyers, so that’s the average rate we will use.
So, those are the starting “ingredients” we will use to estimate the average mortgage payment in Los Angeles. A down payment of 7%, a home price of $677,400, and a mortgage rate of 4.54% on a 30-year loan.
The 7% down payment on a median-priced home in Los Angeles would come to around $47,418. If we subtract that percentage, we end up with a base loan amount of $629,982 for this scenario.
Entering these numbers into a standard mortgage calculator gives us a starting monthly payment of $3,208. That’s just for the principal and interest. But most mortgage payments include property taxes and homeowners insurance as well.
If we add in taxes and insurance, the payment would come to around $4,045.
- Loan size: $629,982
- Mortgage rate: 4.54%
- Monthly payment (P&I): $3,207
- Monthly payment with insurance and taxes: $4,045
This is about as close we can get to determining the average monthly mortgage payment among Los Angeles home buyers in the current real estate market who purchase a median-priced home.
Variables That Can Affect How Much You Pay
Of course, there are a lot of variables that can determine the actual monthly payments you might have to pay on a home loan. The purpose of this exercise is merely to estimate the average across all loans, and to show how prices and payments have risen steadily since this time last year.
The size of your monthly payments will depend on:
- The amount you are borrowing
- The mortgage rate you receive on your loan
- The property tax rate in the county where you live
- Your homeowners insurance premiums
- And other variables
And with home prices expected to rise over the coming months, the average mortgage payment in Los Angeles will most likely be higher in 2019 than it is in 2018. Zillow, for example, recently predicted that the median home value in L.A. would rise by more than 10% over the next year or so. Home buyers who are planning a purchase might want to consider doing it sooner rather than later, to avoid higher housing costs.
Disclaimer: This article provides a rough estimate of the average mortgage payment in Los Angeles based on current home prices, interest rates, and other factors. Your payments could be very different from the figures above, due to a number of variables. This article is provided for educational purposes only and does not constitute financial advice.