How much of a down payment do I need to buy a house in Massachusetts?

Massachusetts offers down payment assistance of up to $30,000 in the form of a second mortgage, but if you choose not to take advantage of this or don't qualify, you still have options. For example, you may qualify for a zero down payment mortgage through VA or the USDA. In addition, conventional mortgages typically only require 3% down, and FHA mortgages just 3.5%.

How much are closing costs in Massachusetts?

Massachusetts closing costs, on average, are quite high compared to the rest of the country. You can expect to need to bring about $7,964 to closing for a home purchase. However, if you're refinancing, the costs are much more reasonable, averaging just $2,486.

What does homeowners insurance cost in Massachusetts?

Homeowners insurance in Massachusetts is really quite reasonable, all things considered. For coverage on a $500,000 home, you'll only pay $2,746, which is $1,931 less than the average price in America for the same amount of coverage.

What is the property tax rate in Massachusetts?

Massachusetts ranks 21 out of 50 for the percentage of tax charged to property owners. You'll pay 1.04% of your property's assessed fair market value each year. The good news is that this varies by county, and generally the further inland you go, the less you'll pay in taxes.

Massachusetts Mortgage Calculator

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Moving to Massachusetts means buying in a state that's been part of the United States since 1788. The Bay State has been the site of many pivotal historic moments, and remains a state filled with a variety of settings, from bustling city to remote wilderness. You can get the home you're dreaming of in Massachusetts, but maybe not for what you're hoping to pay.

That's why we've designed this Massachusetts mortgage calculator. Simply plug in some numbers, and presto, you'll know what you can afford to buy this real estate season.

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That's why we've designed this Massachusetts mortgage calculator. Simply plug in some numbers, and presto, you'll know what you can afford to buy this real estate season.

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Massachusetts housing market 2024

As a whole, Massachusetts is not for everyone, with a median home sales price of $576,000 in February 2024. That's up 9.7% over the year prior, and up nearly 49% from $387,300 in February 2019. The Boston and other coastal markets certainly skew home prices in Massachusetts, but even in some lower cost parts of the state, they're near the national median home sales price.

The availability of homes for sale in Massachusetts is part of what is keeping prices so high, in February 2024, there were just two months of inventory available, the highest since February 2023, leading to 44.6% of homes selling above their asking price. On average, homes in Massachusetts got 0.3% more than what they were listed for.

If you're interested in buying a home in Massachusetts, you need to be prepared for the stiff competition in this market. A good first step is to talk to a mortgage lender to find the best rates available, and secure a pre-approval that you can present to the sellers of the home you're making an offer on to show that you're ready to buy.

Here's a quick peek at some of the most important Massachusetts markets and how things are doing there.

Metropolitan Area	Median Home Value	1-Year Change
Barnstable Town	$669,100	10.4%
Boston - Cambridge - Newton	$657,900	7.1%
Pittsfield	$335,700	4.2%
Springfield	$318,600	6.0%
Worcester	$398,000	9.1%

Data source: National Association of Realtors. Figures accurate as of March 21, 2024.

How do I calculate my mortgage payment?

It's a whole lot easier to use a mortgage calculator like this one to figure out your monthly mortgage payment, but if you want to do it by hand, this is the formula:

The formula above will give you the basic mortgage payment, consisting of principal and interest. However, most modern mortgages are more than just P+I. They also usually include small payments you make toward other expenses that go into an escrow account and are paid on your behalf on a periodic basis.

A few examples of home expenses that can be included with your mortgage payment are:

Property taxes
Homeowners insurance
Flood insurance
Wind insurance
Mortgage insurance
HOA dues
HOA short term assessments

You'll be informed prior to closing which of these items are part of your payment, and if they go into your escrow account. To calculate your new mortgage with these additional expenses included, just click "show additional inputs" on the mortgage calculator above and add your estimated figures. It will get you a very close estimate of what to expect.

Things to know before buying a house in Massachusetts

Massachusetts can be a very expensive place to buy a home, but the costs don't stop with your initial purchase. Taxes in Massachusetts are also quite high, ranking 21st in the nation. A homeowner in Massachusetts, on average, will pay 1.04% of their property's assessed fair market value in taxes each year. So, if your home is assessed for $338,500, you'll be giving the tax authority $3,511.

Massachusetts is among the states affected the most by climate-related temperature changes. In the last century, the state's average temperature has increased by more than two degrees Fahrenheit, causing changing precipitation patterns, which lead to more floods and droughts. Sea levels are rising, threatening to erode and overcome wetlands and beaches. Coastal storms are also an increasing threat for homeowners in cities like Boston.

Considering the cost of housing in Massachusetts and the severe shortage of listings, once you do have a home secured, it would be smart to look into both flood and wind insurance on top of your basic homeowners insurance. Depending on where you live, these may be relatively inexpensive policies at the moment, but could save you thousands of dollars in damage due to climate change related weather.

Ask your insurance agent about these options, then plug the figures that you get into the Massachusetts mortgage calculator to get a better estimate of your new house payment.

Tips for first-time home buyers in Massachusetts

MassHousing has two options for Massachusetts residents looking to buy their first home with down payment assistance. Both programs are in the form of a second mortgage. Depending on your income, you can qualify for up to $30,000 with a 0% interest rate.

Deferred down payment assistance

The deferred down payment assistance program in Massachusetts offers up to $30,000 as a second mortgage for eligible first-time home buyers. This loan is offered at 0% interest and has no payments required until you sell your home, refinance your mortgage, or pay your mortgage in full.

Amortizing down payment assistance

For other borrowers, an amortizing down payment assistance loan is available. This loan is capped at $25,000 and requires monthly payments for 15 years, but the interest rate is just 2%. It also must be paid in full if you sell your home, refinance your mortgage, or pay off your loan entirely.

Advice for all first-time borrowers

Even if you don't qualify for down payment assistance in Massachusetts, there are tons of great programs that can help you get into your own home with very little out of pocket. For example, a USDA loan might be possible further away from the bigger cities, or a VA loan is a great zero down payment option that you've earned as a member of the military.

No matter what kind of loan you end up with, you'll no doubt find more favorable terms if you present yourself as the best possible borrower you can. What that means is a little different for everyone, but here are a few things that underwriters look for:

Continuous employment history. Keep that job you're in for at least two years, and if you must change jobs, try to stay in your same field.
Great credit. You don't need perfect credit to qualify for a home loan, but it doesn't hurt if you do. Make all your payments on time no matter what.
Low debt. Having a credit card and paying it in full each month is a great way to flex your credit muscles and also keep your debt burden to a minimum. After all, underwriters look at how much you owe compared to how much you earn.
Seasoned savings. Sometimes, underwriters also want to know that your money is your own, through a process called seasoning. This just means that the money you intend to use to buy your house has been in your savings account for at least 60 days.

Depending on your financial picture, your lender may also ask that you have reserves on hand. This is money that's stashed away just in case you can't make your mortgage payment. Generally, reserves will be for the entire housing payment, including your escrowed bills (like property taxes), for anywhere from two to six months.

Whatever you do, don't open any new credit lines or charge up your existing ones while you're in the limbo between application and closing. This can change your entire credit balance and you risk losing your loan qualification.

FAQs

Massachusetts offers down payment assistance of up to $30,000 in the form of a second mortgage, but if you choose not to take advantage of this or don't qualify, you still have options. For example, you may qualify for a zero down payment mortgage through VA or the USDA. In addition, conventional mortgages typically only require 3% down, and FHA mortgages just 3.5%.
Massachusetts closing costs, on average, are quite high compared to the rest of the country. You can expect to need to bring about $7,964 to closing for a home purchase. However, if you're refinancing, the costs are much more reasonable, averaging just $2,486.
Homeowners insurance in Massachusetts is really quite reasonable, all things considered. For coverage on a $500,000 home, you'll only pay $2,746, which is $1,931 less than the average price in America for the same amount of coverage.
Massachusetts ranks 21 out of 50 for the percentage of tax charged to property owners. You'll pay 1.04% of your property's assessed fair market value each year. The good news is that this varies by county, and generally the further inland you go, the less you'll pay in taxes.

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