Michigan Mortgage Calculator
Calculate your Michigan mortgage payment with PMI, property tax, and closing costs.
Useful for home buyers in Detroit, Grand Rapids, Ann Arbor, Lansing, Kalamazoo, and all of Michigan.
Useful for home buyers in Detroit, Grand Rapids, Ann Arbor, Lansing, Kalamazoo, and all of Michigan.
Why use a Michigan Mortgage Calculator?
Michigan has a unique property tax system with a Principal Residence Exemption (PRE) and relatively high property tax rates. This calculator estimates your payment, PMI, property tax, and closing costs.
Michigan has a unique property tax system with a Principal Residence Exemption (PRE) and relatively high property tax rates. This calculator estimates your payment, PMI, property tax, and closing costs.
Result
Enter your details to see the estimated payment here.
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Michigan Property Tax: The average effective property tax rate is about 1.54%, though primary residences qualify for the Principal Residence Exemption (PRE), which can reduce the tax significantly. Transfer taxes include a state tax of 0.75% and county taxes ranging from 0.11% to 0.75%.
Average Home Prices in Major Michigan Cities (2024)
| City | Detached | Semi-Detached | Townhouse | Condo |
|---|---|---|---|---|
| Detroit | $170,000 | $145,000 | $135,000 | $195,000 |
| Grand Rapids | $289,000 | $250,000 | $230,000 | $260,000 |
| Ann Arbor | $510,000 | $420,000 | $380,000 | $350,000 |
| Lansing | $175,000 | $160,000 | $150,000 | $170,000 |
| Kalamazoo | $200,000 | $180,000 | $170,000 | $185,000 |
Note: Prices are approximate averages for 2024 and may vary by neighborhood and property features.
How Mortgage Rules Work in Michigan
- Property Tax: Michigan's average effective property tax rate is about 1.54%, but varies by municipality. The Principal Residence Exemption (PRE) exempts primary residences from up to 18 mills of school operating taxes.
- Transfer Tax: Michigan has a state transfer tax of 0.75% and county transfer taxes ranging from 0.11% to 0.75% of the property value.
- PMI (Private Mortgage Insurance): If your down payment is less than 20%, you must pay PMI, which is added to your monthly payment until you reach 20% equity.
- Taxable Value Cap: Under Michigan's Proposal A, a property's taxable value can only increase annually by the rate of inflation or 5%, whichever is less, until the property is sold.
Example: On a $300,000 home with 10% down in Grand Rapids, you pay PMI and property tax of about $4,620 annually (with PRE). Transfer taxes would be approximately $2,580, and closing costs typically run 3-6% of the purchase price.
Frequently Asked Questions
The Principal Residence Exemption (PRE), formerly called the Homestead Exemption, exempts a principal residence from up to 18 mills of school operating tax. To qualify, you must own and occupy the property as your primary residence. The exemption significantly reduces property taxes and must be applied for by filing a form with your local assessor.
Proposal A, passed in 1994, limits annual increases in a property's taxable value to the rate of inflation or 5%, whichever is less, regardless of how much the market value increases. However, when a property is sold, the taxable value is "uncapped" and reset to the property's state equalized value (50% of the market value). This can result in significantly higher property taxes for new homeowners compared to the previous owners.
Michigan has two types of transfer taxes: the State Transfer Tax at 0.75% of the property's value ($7.50 per $1,000) and County Transfer Taxes ranging from 0.11% to 0.75% depending on the county. In most counties, including Wayne County (Detroit), the county tax is 0.11% ($1.10 per $1,000). These taxes are typically paid by the seller but can be negotiated in the purchase agreement.