Average Monthly Mortgage Payments in the Bay Area, 2021 Update

It’s no surprise that the San Francisco Bay Area is an expensive real estate market. In fact, we have some of the highest average home prices of any metropolitan area in the country.

A recent report showed that the average monthly mortgage payment in the Bay Area was just over $6,000, as of summer 2021. But don’t be too alarmed by that figure. There are many things you can do to reduce your monthly housing costs, when buying a home in this market.

Average Monthly Mortgage Payment in the Bay Area

In August 2021, the California Association of Realtors (CAR) published a report on housing affordability across the state. Among other things, this report showed the typical or average monthly mortgage payment in the San Francisco Bay Area and other parts of the state.

According to the report, a typical monthly home loan payment in the Bay Area was around $6,200 as of July 2021. But that figure was based on certain assumptions that might not apply to your particular situation.

The average mortgage payment reported by CAR was based on the following:

• purchasing a median-priced home
• using a 30-year fixed mortgage loan
• making a down payment of 20%
• includes taxes and insurance

As of summer 2021, the median home price in the San Francisco region was just over $1.3 million. Using the parameters listed above, CAR determined that the average monthly mortgage payment in the Bay Area would come to around $6,200.

Most and Least Affordable Counties

The CAR report also showed the average payment for individual counties, within our region and also statewide.

Based on that breakdown, Solano County had the lowest average mortgage payment of any county within the Bay Area. With the parameters outlined above, a typical monthly house payment in Solano County was around $2,630 per month.

At the upper end of the pricing spectrum, we have San Mateo County. According to CAR, San Mateo County had the highest average monthly mortgage payment in the Bay Area during 2021, coming in at $9,760 per month. That was actually the highest monthly payment of any county in California.

To quote the August 2021 CAR report:

San Mateo County was the least affordable, with just 17 percent of households able to purchase the $2,117,500 median-priced home. Forty percent of Solano County households could afford the $570,000 median-priced home, making it the most affordable Bay Area county.

Solano and San Mateo are therefore the most and least affordable counties for home buyers in the Bay Area. Solano County has some of the most affordable home prices of any county in the region, while San Mateo is the most expensive / least affordable housing market for home buyers.

How to Lower Your Housing Costs

Can’t afford the average monthly mortgage payment in the Bay Area? Not to worry. There are certain things you can do to reduce your monthly housing costs. In fact, many home buyers in the Bay Area currently enjoy a monthly mortgage payment well below the $6,200 average figure mentioned above.

Here are some ways to make your monthly housing costs more affordable:

1. Seek out more affordable neighborhoods, communities and cities.

Some parts of the Bay Area are much more affordable than others, when it comes to buying a home. We just looked at the vast difference between Solano County and San Mateo County. Those two counties represent the least and most affordable housing markets in the region. And there’s a pretty wide spectrum in between.

The point is, a monthly mortgage payment in the Bay Area could be larger or smaller depending on where you buy a home. So be as flexible as you can, when it comes to location.

2. Stretch out the repayment term.

By spreading your mortgage payments over a longer period of time, you end up paying less per month. Someone with a 30-year fixed mortgage loan would have a much smaller monthly payment than someone with a 15-year loan (with all other things being equal).

3. Try to avoid private mortgage insurance.

Borrowers who put down less than 20% usually end up with a loan-to-value ratio greater than 80%. This is what triggers private mortgage insurance, or PMI. Mortgage insurance gets rolled into your monthly house payments, so it can increase the size of those payments.

You could avoid PMI by making a down payment of 20% — or by combining two different loans so that neither is more than 80% of the home value. This could reduce the size of your monthly mortgage payments, potentially saving you a lot of money over time.

4. Consider paying points for a lower interest rate.

As a borrower, you will probably have the option to pay “discount points” at closing. This is basically a form of prepaid interest. The idea is that you pay a certain amount extra at closing, in exchange for a lower mortgage rate.

By reducing your interest rate, you would end up with a lower monthly mortgage payment on your Bay Area home. And if you stay in the home long enough, you would eventually recoup the amount you paid in points.

Disclaimer: This article reviews the average monthly mortgage payment in the San Francisco Bay Area for 2021. It’s based on data provided by a third-party source not associated with our company. There are many variables that can affect your monthly mortgage payments. So portions of this article might not apply to your particular situation.