Point of Interest
Illinois mortgage rates are currently below the national average, but higher property taxes and the cost of living in some areas of this state need to be weighed before you buy a home in Illinois.
Current mortgage rates in the state of Illinois are slightly below the national average, which may offer some savings to homebuyers and homeowners who are interested in refinancing. Before you go buying a house in Illinois, though, you need to make sure to look at the cost of living and the property tax rates across the state. In many areas of Illinois, these costs are quite high, so depending on where you live, it could negate a lot of the savings you would get via your lower mortgage rate.
Getting a mortgage in Illinois
While many cities in the state of Illinois have astronomically high median home prices, the state median is still about $15,000 below the national average. The median monthly ownership costs for the state area are about $100 over the national average, which means buyers could face higher costs in Illinois than in other states.
Part of those added costs can be attributed to property taxes, as Illinois has some of the highest in the country. The cost of living should also be considered when looking at getting a mortgage in the state of Illinois. According to World Population’s cost of living index, Illinois has the 21st lowest cost of living in the nation. The same study cites Illinois as the 23rd least expensive when it comes to housing.
- Median home price: $187,200
- Average 30-year fixed rate: 3.05%
- Median monthly ownership cost: $1,668
- Homeownership rate: 66.0%
Illinois state mortgage rate trends
Over the past two years, mortgage rates in Illinois have been generally trending downward, with two small upward spikes in late 2018 and early 2020. Both spikes were short-lived, and the mortgage rates in the state continued to trend downward.
Rates on 30-year fixed-rate mortgages were just below about 4.5% in April 2020. Rates peaked around 4.85% in late 2018 but have now reached an average low of about 3.05% as of Aug. 11. All other fixed-rate loan terms have followed a similar path.
Illinois state current mortgage rates
Mortgage rates in the state of Illinois are currently at or slightly below the national averages. The average rate for 30-year fixed-rate mortgages in Illinois was 3.05% as of Aug. 11. The average rate for 15-year mortgages in Illinois was 2.060% compared to the national average of 2.630% as of Aug. 11.
Most and least expensive places to live in Illinois
Most expensive places to live in Illinois
1. Evanston — Evanston’s cost of living is 42% above the national average. The majority of this can be attributed to housing, as housing pricing in the city are 146% above the national average. The median home price is $854,777 and the median rent is $2,678.
2. Arlington Heights — At a 36% higher cost of living than the average for the rest of the country, expect to pay a premium for living in Arlington Heights. The biggest cost is housing, which is 115% higher than the national average. The median rent is $2,341 per month and the median home price is $747,214.
3. Des Plaines — The cost of living in Des Plaines is 24% over the national average. The two biggest contributors are housing and transportation. The median home price in the area is $542,481 and the median monthly rent is around $1,699. The price for a gallon of gas averages out to about $3.30.
4. Chicago — Chicago’s cost of living is 23% higher cost of living than the national average. The biggest cost is housing, with the median home price at $539,932 and the median rent at $1,691. Expect no breaks with transportation, as the cost of living is around 27% higher than the national average.
5. Cicero — Transportation, grocery costs and housing costs are all above the national average in Cicero. Transportation is 11% over the national average while groceries are only 2% over the national average. The cost of a loaf of bread in Cicero is about $3.39 and the cost for a gallon of milk is about $1.97.
Least expensive places to live in Illinois
1. Rockford — The cost of living in Rockford is about 10% below the national average thanks to lower housing, utility and grocery costs. The median home price in Rockford is $268,925 and the median rent is $842.43.
2. Champaign — Champaign offers a cost of living that is 9% below the national average. The median home price in the area is $266,496 and the median rent is $834.82. Groceries are 9% below the national average and transportation is 3% lower. Be aware, though, that utilities in the city are 14% above the national average, with an average energy bill of $190.29 monthly.
3. Springfield — With an overall cost of living that’s 5% below the national average, Springfield may offer savings to new residents. The cost of housing is 20% below the national average, with a median home price of $277,600. Utilities are also 11% below the national average, with the average monthly energy cost of $149.39.
4. Peoria — The median home price in Peoria, IL, is $305,360 and the median rent is $956.56. That’s about 12% lower than the national average. Groceries are 8% below the national average, and you can expect to pay about $3.08 for a loaf of bread and $1.79 for a gallon of milk.
5. Joliet — Joliet is on par with the overall national average for cost of living. While housing is 5% over the national average, utilities are 16% below the average. Expect to pay about $140.67 per month on your energy bill.
Illinois state mortgage resources and intricacies
People looking to buy a home in Illinois should take some time to check out the Illinois Housing Development Authority website or the HUD website for the state of Illinois. Each provides valuable information and resources that may help you in your upcoming purchase.
One major downside to buying a home in Illinois that you should be aware of is the property taxes. Ranked 7th in the nation, the effective tax rate in Illinois is 1.73%.
The final word
Moving to Illinois may save you money on mortgage rates compared to other states, but you will face a higher cost of living in many parts of the state along with higher property taxes. The cost disparities between the different cities in Illinois mean you should take the time to properly research the different areas you may be interested in buying in, but there are still great deals to be found in many parts of this state.