Compare different loan terms using your home price of $350,000 with $70,000 down at 6.8%.
15-Year Fixed
$2,401/mo
Total interest: $152,141
Total cost: $432,141
Save $221,646 vs 30-year
20-Year Fixed
$2,088/mo
Total interest: $221,025
Total cost: $501,025
Save $152,762 vs 30-year
30-Year Fixed (Current)
$1,816/mo
Total interest: $373,787
Total cost: $653,787
Lowest monthly payment
Pro
Professional Simulator
Complete financial model: closing costs breakdown, rent vs buy, inflation-adjusted returns, true cost of ownership
years
%
%
%
%
10-Year Net Gain/Loss
-$173,685
After selling in year 10 at $493,710
Total Paid Over Hold Period
$398,929
Down + closing + all payments
Home Value at Sale
$493,710
3.5%/ yr appreciation
Selling Costs
$29,623
6% of sale price
Net Sale Proceeds
$225,244
After mortgage payoff + selling costs
Real Interest Rate
4.25%
Nominal 6.8% - inflation 2.5%
Real Monthly Payment
$1,254
Today's dollars (mid-loan)
State Property Tax
$5,600
TX rate: 1.6%
True Monthly Cost
$2,499
PITI + HOA + maintenance
Buying a Home in Tennessee
Tennessee has become one of the most sought-after relocation destinations in the country, offering a combination of no state income tax, low property taxes, warm weather, and increasingly competitive job markets. With an average home price of $310,000, Tennessee remains more affordable than many states drawing similar relocation interest, though the Nashville metro has seen dramatic price appreciation and now commands premiums comparable to much larger coastal cities in some neighborhoods.
Nashville, Tennessee's largest city and capital, is a boomtown — home to a growing tech sector (Amazon HQ2 operation, Oracle), a thriving healthcare industry (HCA Healthcare, Community Health Systems), and one of the world's most recognized music and entertainment brands. Surrounding suburbs like Franklin, Brentwood, Nolensville, and Spring Hill have become among the most competitive housing markets in the Southeast. Even Murfreesboro, 35 miles southeast of Nashville, has seen median prices approach $400,000.
Knoxville and Chattanooga offer compelling alternatives for buyers seeking Tennessee's tax advantages without Nashville's price premiums. Both cities have revitalized downtowns, outdoor recreation access (mountains in both cases), and growing professional economies. Memphis, in the southwest corner of the state, remains one of the most affordable mid-sized cities in the country for buyers seeking exceptional value.
Key Housing Facts for Tennessee
Average home price: $310,000
Average effective property tax rate: 0.56%
Average homeowners insurance: $1,600/year
No state income tax
Most competitive markets: Nashville metro, Franklin, Brentwood
Value markets: Knoxville, Chattanooga, Memphis, Clarksville
Frequently Asked Questions
Tennessee's average effective property tax rate is approximately 0.56%, well below the national average. On a $310,000 home, you'd pay roughly $1,736 per year in property taxes. Tennessee also has no state income tax on wages (investment income is no longer taxed after the Hall income tax was fully eliminated), which significantly reduces the overall tax burden for homeowners.
Tennessee Housing Development Agency (THDA) offers the Great Choice Home Loan with competitive interest rates and the Great Choice Plus program providing $6,000 in down payment assistance as a deferred second loan. The Hardest Hit Fund Down Payment Assistance program provides additional support in targeted counties. Income and purchase price limits apply by county and household size.
No. Tennessee eliminated its Hall income tax (which previously taxed investment income) fully as of 2021. Tennessee now has no state income tax of any kind. Combined with the state's low property tax rate and moderate home prices, this makes Tennessee one of the most tax-favorable states in the South and a major draw for retirees, remote workers, and high-income earners relocating from higher-tax states.
Nashville (Davidson County) and its surrounding suburbs — Brentwood, Franklin, Murfreesboro, Nolensville — have experienced extraordinary growth and price appreciation over the past decade, driven by corporate relocations, a thriving tech and music industry ecosystem, and significant in-migration. Memphis offers a very different market with much lower prices. Knoxville and Chattanooga have emerged as compelling secondary markets with strong quality of life at more accessible prices than Nashville.