Median home: $375,000 | Mortgage rate: 7% | Property tax: 0.66% | Insurance: $1,500/yr
Tennessee is a booming Southeast state with no state income tax. With a median home price of $375,000 and mortgage rates averaging 7%, understanding what you can afford before house hunting is essential.
The 28/36 rule is the gold standard: spend no more than 28% of gross income on housing and no more than 36% on total debt. In Tennessee, with a property tax rate of 0.66% and average insurance of $1,500/year, these costs add significantly to your monthly payment beyond just principal and interest.
A 20% down payment on the median Tennessee home requires $75,000. FHA loans with 3.5% down need just $13,125, but you will pay mortgage insurance. Tennessee has no state income tax on wages. Low property taxes add to overall affordability.
See all Tennessee financial calculators:
Based on the 28/36 rule, your total housing payment should not exceed 28% of gross monthly income, and total debts should stay under 36%. In Tennessee, with median home prices at $375,000, you typically need a household income of at least $375,000 to afford the median home.
To afford the median Tennessee home at $375,000 with 20% down at 7% interest, you need approximately $85,539 annual household income. This is based on the 28% housing cost guideline.
The median home price in Tennessee is approximately $375,000 as of 2026. Prices vary significantly by city and county. Tennessee is a booming Southeast state with no state income tax.
A 20% down payment on the median Tennessee home ($375,000) is $75,000. FHA loans allow 3.5% down ($13,125) and VA loans offer 0% down for eligible veterans.
Tennessee has a property tax rate of 0.66%, which is below the national average. On the median home, that is $2,475/year. Tennessee has no state income tax on wages. Low property taxes add to overall affordability.