# Tennessee home loans: payments, recordation taxes and THDA help

> Tennessee mortgage math: $2,450/mo on the median home, the 0.37% transfer and 0.115% mortgage taxes, property tax and THDA Great Choice Plus.

URL: https://mortgage-math-us.com/location/tennessee/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

The median Tennessee home is worth $332,600 and costs about **$2,450 a month** with 10% down at the 7.24% national average rate; $125 of that is property tax at the state’s 0.45% effective rate, below the national 0.89%. Tennessee adds two taxes at closing: a 0.37% transfer tax on the price and a 0.115% tax on the mortgage, about $1,573 together on the median home. THDA’s Great Choice Plus adds up to $15,000 in down payment help.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Median home value in Tennessee | $332,600 | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=040XX00US47) | 2024 ACS 1-year |
| Median household income | $71,997/yr | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B19013?g=040XX00US47) | 2024 ACS 1-year |
| Effective property tax rate | 0.45% | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=040XX00US47) | 2024 ACS 1-year |
| Realty transfer tax (share of price) | 0.37% | [Tennessee Department of Revenue](https://www.tn.gov/revenue/taxes/local-taxes/recordation-taxes/due-date-tax-rate.html) | May 6, 2024 |
| Mortgage tax (share of the loan) | 0.115% | [Tennessee Department of Revenue](https://www.tn.gov/revenue/taxes/local-taxes/recordation-taxes/due-date-tax-rate.html) | May 6, 2024 |
| THDA Great Choice Plus, up to | $15,000 | [Tennessee Housing Development Agency: Down Payment Assistance](https://thda.org/homebuyers/down-payment-assistance/) | Oct 29, 2026 |
| THDA minimum credit score | 640 | [Tennessee Housing Development Agency: Great Choice Home Loan](https://thda.org/homebuyers/first-time-homebuyers/) | Oct 29, 2026 |

## Prices against Tennessee paychecks

Tennessee’s median home value of $332,600 is below the national median, and its median household income of $71,997 is below the national figure — the 11th-lowest of the 50 states and DC. Put together, the median home costs 4.6 times the median income, the 17th-highest ratio in the country and above the US ratio of 4.4.

*Tennessee, Nashville and the US (Census ACS 2024 1-year)*

| | Tennessee | Nashville-Davidson | United States |
|---|---:|---:|---:|
| Median home value | $332,600 | $438,800 | $360,600 |
| Median household income | $71,997 | $80,090 | $81,604 |
| Home value ÷ income | 4.6× | 5.5× | 4.4× |
| Effective property tax rate | 0.45% | 0.56% | 0.89% |
| Median gross rent | $1,284/mo | $1,669/mo | $1,487/mo |
| Owner-occupied share | 66.8% | 51.8% | 65.3% |

Nashville’s median value is higher than the state’s and its effective tax rate is higher; the [Nashville housing guide](https://mortgage-math-us.com/location/nashville-tn/) covers Metro’s numbers and local programs in detail.

## The median Tennessee home, month by month

> **Worked example: $332,600 home (Tennessee median value), 10% down, 30-year fixed at 7.24%**
>
> | Part of the payment | Monthly |
> |---|---:|
> | Principal and interest on $299,340 | $2,040 |
> | Property tax at 0.45% a year | $125 |
> | Homeowners insurance at $4.90 per $1,000 of value (national average) | $136 |
> | PMI (midpoint of Freddie Mac’s range) | $150 |
> | **Total** | **$2,450** |
> 
> Principal and interest make up $2,040 of the $2,450, so the interest rate moves this payment far more than the tax rate does.

The insurance line uses Freddie Mac’s national average per $1,000 of value; Tennessee premiums vary with roof age, storm exposure and the insurer, so price a policy early. Try other prices or down payments in the [mortgage payment calculator](https://mortgage-math-us.com/tools/mortgage-payment-calculator/?price=333000&down=10&tax=0.45&state=TN).

## How much house a Tennessee median income buys

On $71,997 a year, Freddie Mac’s guideline of spending no more than 30% of gross income on housing allows $1,800 a month. With 10% down at today’s average rate, the state tax ratio and the national insurance average, that supports a home of about **$244,000** — $88,600 less than the median value. Buying the median home within the guideline takes a household income of roughly $98,000. The [affordability calculator](https://mortgage-math-us.com/tools/affordability-calculator/?state=TN&income=71997) shows what your own income and debts support.

## Tennessee’s transfer tax and mortgage tax at closing

Tennessee taxes both documents you record when you buy with a loan. The realty transfer tax is 0.37% of the purchase price, and the mortgage tax is 0.115% of the debt above the first $2,000.

> **Worked example: Recordation taxes on the median Tennessee home with 10% down**
>
> | Tax | Based on | Amount |
> |---|---|---:|
> | Realty transfer tax | $332,600 price | $1,231 |
> | Mortgage tax | $299,340 loan, less the exempt $2,000 | $342 |
> | **Total** | | **$1,573** |
> 
> That is about 0.47% of the price before any lender, title or prepaid costs.

Your purchase contract sets which side pays the transfer tax. The mortgage tax is tied to your loan, so it normally sits with the buyer’s costs, and a larger down payment trims it. Add lender fees, title insurance and prepaid items and the CFPB’s typical range of 2%–5% comes to $6,652–$16,630 on the median home. The [closing cost calculator](https://mortgage-math-us.com/tools/closing-cost-calculator/?state=TN&price=333000) applies both Tennessee taxes automatically.

## THDA Great Choice Plus: deferred or amortizing

The Tennessee Housing Development Agency’s Great Choice Home Loan is a 30-year fixed-rate mortgage, most often insured by FHA or USDA, made through participating lenders. Every borrower needs a credit score of at least 640, and a homebuyer education class is required if you take down payment assistance. Great Choice Plus offers two kinds:

| Option | Amount | Terms |
|---|---|---|
| Deferred | Up to $10,000 | 0% second mortgage, no payments; forgiven after 10 years; due in full if you sell or refinance sooner |
| Amortizing | Up to 5% of the sales price, capped at $15,000 | 30-year loan at the first mortgage’s rate, repaid monthly |

On the median home the amortizing option could reach $15,000 (the cap applies on the median home), which at the example rate adds about $102 a month. The deferred option adds nothing to the payment but has to be repaid if you leave early, so weigh how long you expect to stay. THDA serves first-time, repeat and military buyers; see [homebuyer education](https://mortgage-math-us.com/first-time-buyers/homebuyer-education/) for what the class covers.

## Below-average property tax rates, set by counties and cities

Tennessee’s effective rate of 0.45% is the 6th-lowest among the 50 states and DC. The median homeowner pays $1,488 a year, $1,723 less than the national median bill of $3,211. Rates are set locally, and a home inside city limits can owe both a county and a city rate, so compare the tax history of each listing rather than relying on a statewide average.

## Frequently asked questions

### What is the property tax rate in Tennessee?

Census data put the median Tennessee homeowner’s bill at $1,488 a year, an effective rate of about 0.45% of home value against 0.89% nationally. County and city rates decide the bill on a specific home.

### How much is the transfer tax in Tennessee?

The realty transfer tax is 0.37% of the purchase price — about $1,231 on the median $332,600 home. The contract decides who pays it.

### What is the mortgage tax in Tennessee?

Tennessee taxes recorded mortgage debt at 0.115% of the amount above the first $2,000. On a $299,340 loan that is about $342.

### What is THDA Great Choice Plus?

Down payment and closing-cost help paired with a THDA Great Choice Home Loan: either a deferred 0% loan of up to $10,000 forgiven after 10 years, or an amortizing loan of up to 5% of the sales price, capped at $15,000.

### What credit score do I need for a THDA loan?

THDA requires a credit score of at least 640 for everyone on the loan application.

### How much income do you need to buy a house in Tennessee?

To keep housing under 30% of gross income on the median home with 10% down at today’s average rate, roughly $98,000 a year, assuming few other debts. The median Tennessee household earns $71,997.

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=040XX00US47) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B19013?g=040XX00US47) — Median household income (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=040XX00US47) — Effective property tax rate (median taxes ÷ median home value); Median real estate taxes paid by homeowners (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B19013?g=010XX00US) — Median household income (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) — Effective property tax rate (median taxes ÷ median home value); Median real estate taxes paid by homeowners (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=160XX00US4752006) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B19013?g=160XX00US4752006) — Median household income (2024 ACS 1-year)
- [Freddie Mac Research](https://www.freddiemac.com/research/insight/homeowners-insurance-costs) — Average homeowners insurance premium per $1,000 of home value (2023 data)
- [Freddie Mac My Home](https://myhome.freddiemac.com/buying/breaking-down-pmi) — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- [Freddie Mac My Home](https://myhome.freddiemac.com/blog/homebuying/how-much-can-you-afford) — Freddie Mac guidance: housing costs below this share of gross income (Jan 22, 2026)
- [Tennessee Department of Revenue](https://www.tn.gov/revenue/taxes/local-taxes/recordation-taxes/due-date-tax-rate.html) — State real estate transfer tax; State tax on recording a mortgage; Tennessee mortgage tax: exempt first part of the debt (May 6, 2024)
- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Typical closing costs, low end (share of purchase price); Typical closing costs, high end (share of purchase price) (Oct 28, 2026)
- [Tennessee Housing Development Agency: Down Payment Assistance](https://thda.org/homebuyers/down-payment-assistance/) — THDA Great Choice Plus amortizing assistance, up to (share of the sales price); THDA Great Choice Plus amortizing assistance, up to; THDA Great Choice Plus deferred (forgivable) assistance, up to (Oct 29, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=160XX00US4752006) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25064?g=040XX00US47) — Median gross rent (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25064?g=160XX00US4752006) — Median gross rent (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25064?g=010XX00US) — Median gross rent (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25003?g=040XX00US47) — Share of occupied homes lived in by their owners (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25003?g=160XX00US4752006) — Share of occupied homes lived in by their owners (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25003?g=010XX00US) — Share of occupied homes lived in by their owners (2024 ACS 1-year)
- [Tennessee Housing Development Agency: Great Choice Home Loan](https://thda.org/homebuyers/first-time-homebuyers/) — THDA Great Choice Home Loan minimum credit score (every borrower) (Oct 29, 2026)
- [THDA: Down payment assistance](https://thda.org/homebuyers/down-payment-assistance/)
- [THDA: Great Choice Home Loan](https://thda.org/homebuyers/first-time-homebuyers/)
- [Tennessee Department of Revenue: Recordation tax rates](https://www.tn.gov/revenue/taxes/local-taxes/recordation-taxes/due-date-tax-rate.html)

_General information, not financial advice._