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Mortgage Rates in Alabama

Kimberly Rotter
By: Kimberly Rotter

Our Mortgages Expert

Nathan Alderman
Check IconFact Checked Nathan Alderman

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If you're ready to purchase a home in Alabama, you'll want to start by shopping around for the best mortgage rates in the state, as your home loan will likely be the biggest debt you take on. Banks, credit unions, and online lenders all provide mortgages, and the interest rate you can get will depend in part on your credit and other financial factors.

5 affordable places to live in Alabama

We scoured local statistics to help you find the Alabama cities easiest on your wallet. If you're looking for an affordable place to purchase your Alabama home, here are five places in Alabama with a low cost of living.

1. Montgomery

Montgomery is not only Alabama's most affordable city, but it also has the 16th-lowest cost of living of any city in America, according to Niche. The median home value in the area is just $121,200, and 55% of residents own their own home. The city is affordable for homeowners not just because home values are well below the national median value of $217,500, but also because property taxes average just 0.36% of a property's assessed fair market value -- one of the lowest in the country.

2. Birmingham

This city of 212,000 is also known for its affordability. Niche notes the median home value in this area is just $91,100. While its property tax rate is a little higher, averaging 0.58% of a property's assessed fair market value, your money stretches further if you make Birmingham your home. According to Niche, Birmingham takes the 20th spot for cities with the lowest cost of living in the U.S.

3. Huntsville

Huntsville is another Alabama city with more owners than renters, with 57% of residents owning their own home. And it's no wonder, as Huntsville is ranked the sixth-best city to buy a house in America out of 228 locations (Niche bases this "best" rating on things like home costs and property taxes). The city, which has a median home value of $182,900, is the county seat of Madison, where property taxes average 0.43% of a property's fair market value. It also stretches into Limestone County, where taxes average an even more affordable 0.31%.

4. Mobile

Mobile comes in at No. 39 on Niche's list of America's most affordable cities. The median home value in the area is just $123,600, which helps explain why 53% of residents are owners rather than renters. Mobile also has one of the country's lowest property tax rates, collecting an average of just 0.5% of the assessed fair market value of each property.

5. Gadsen

Although not classified as a city, Gadsen is one of Alabama's most affordable towns. Among its 35,486 residents, around 60% are homeowners -- which makes sense given that the area's median home value is just $73,600. Gadsen was also named by Niche as the fifth-best place to live in Etowah County -- a county where property taxes are just 0.38% of assessed value of local homes.

Choosing an affordable home will allow you to borrow less and keep your monthly payments down. You can also keep costs low by shopping among multiple lenders for the best mortgage rates in Alabama to see which provides the best deal for you.

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The Ascent's best mortgage lenders

If you want to uncover more about the best mortgage lenders for low rates and fees, our experts have created a shortlist of the top mortgage companies. Some of our experts have even used these lenders themselves to cut their costs.

Our Mortgages Experts