Mortgage Rates in Indiana

If you're thinking about purchasing a home in the Hoosier State, shopping around for the best mortgage rates in your area could save you thousands over the life of your loan. Many factors affect the rate you're offered by mortgage lenders such as banks, credit unions, and online lenders.

5 affordable places to live in Indiana

Your interest rate is just one factor affecting how much you pay for your home loan -- your loan size also matters. To keep costs down, check out these five affordable places to purchase an Indiana home.

1. Fort Wayne

Fort Wayne is Indiana's lowest-priced city, and was named by Niche as the No. 1 city with the lowest cost of living in America. A full 62% of residents own their homes, perhaps aided by a median home value of $115,100, which is around $100,000 below the national average. The area also boasts a property tax rate of just 0.94% in Allen County, according to Tax-rates.org, which may help explain why Fort Wayne was also designated the 11th-best city in which to buy a house in all of the U.S.

2. South Bend

South Bend has the fourth-lowest cost of living of any city in America, according to Niche. Almost 6 in 10 of the city's 102,037 residents are homeowners, and the median value of these homes is just $85,200. Property taxes in St. Joseph County, where South Bend is located, are a little higher than in Fort Wayne, at 1.13% of assessed fair market value, according to Tax-Rates.org. Still, South Bend ranks as the 32nd-best city (out of 228) to buy a house in the U.S. It's also home to many attractions residents will enjoy, including the Studebaker National Museum and the Potawatomi Zoo, which is Indiana's oldest animal park.

3. Evansville

Evansville is home to around 118,000 people, and 55% of residents are homeowners. Ranked seventh on the list of American cities with the lowest cost of living by Niche, Evansville is also recognized as a great city for retirees. Niche also listed it at No. 28 for best cities in America in which to purchase a home. With a median home value of just $94,200 and a property tax rate of 0.78% in the county of Vanderburgh, Evansville is an affordable place to buy.

4. Indianapolis

Coming in at No. 50 on the list of cities with the lowest costs of living in America, Indianapolis has been recognized for its affordability and its diversity. About 53% of its residents are homeowners. The median home value is a bit higher than in the other cities on this list at $137,00, but the price is low relative to the national average. That low cost combined with a property tax rate of 1.15% of median home value in Marion County makes Indianapolis relatively inexpensive compared to other areas across the country.

5. Wabash

This town of 10,089 offers a median home value of just $82,400 and property taxes of 0.55% of that value, both of which help explain why 66% of residents are owners rather than renters. Wabash is home to the historic Eagles Theatre, and for those who love the outdoors, the town boasts five must-see waterfalls, including Hathaway Preserve at Ross Run and Charley Creek Falls.

Many factors determine where you'll ultimately purchase your home, but choosing to buy in these or other affordable areas in Indiana could make becoming a homeowner much cheaper. A low home price makes it easier to come up with a down payment and also reduces total mortgage costs over time, since you don't need to borrow as much.