A median Alabama home costs $233,300 (44th of 51). Borrowing 80% at 7.40% gives $1,525.01 per month once $73.92 of tax and $158.83 of insurance are added to $1,292.26 of principal and interest; at 5% down with PMI, budget $1,859.65.
Homestead exemptions and property tax relief
The regular homestead exemption takes $4,000 off the assessed value for state tax and up to $2,000 for county tax. Owners 65 and older are exempt from the state portion, and lower-income seniors and disabled owners can get larger exemptions (types H-2 through H-4). Apply with the county tax assessor or revenue commissioner.
First-time buyer programs
The Alabama Housing Finance Authority's Step Up program pairs a 30-year fixed mortgage with down payment help equal to the lesser of 4% of the price or $10,000. That help is a 10-year second mortgage repaid monthly. It requires household income of $172,800 or less, a 640 score and homebuyer education.
Transfer and recording taxes
Alabama charges a deed tax of $0.50 per $500 (about $234 on a $233,300 home) and a mortgage tax of $0.15 per $100 of the loan (about $280 on a $186,640 loan). Fractions round up.
Closing costs to plan for
Government charges are modest, so most buyer costs are lender and title fees. Get a wind and hail insurance quote early, since it can change your monthly budget the most.
When property tax bills are due
Alabama property taxes are due October 1 and become delinquent after December 31. Unpaid taxes move to the probate court in February and can be sold at a tax sale in May. The county does not have to mail a notice, and the owner is responsible whether or not a bill arrives, so make sure the county revenue office has your address after you close.
Before you buy in Alabama
Homestead status matters because it puts a primary residence in the lower residential tax class. You must own and live in the home on the first day of the tax year, and counties such as Madison and Covington take applications through December 31, sometimes for the next tax year. The basic homestead exemption removes up to $4,000 of assessed value from state tax and $2,000 from county tax. Owners 65 and older, disabled or blind get larger exemptions; for example, those 65 and older are exempt from the state portion entirely.
2026 loan limit in Alabama
FHFA 2026 one-unit conforming limits: the $832,750 baseline covers each of the 67 counties. The typical $186,640 loan stays conforming.
Alabama numbers used above
| Measure | Alabama | U.S. |
|---|---|---|
| Median home value (ACS 2024) | $233,300 | $360,600 |
| Effective property tax rate | 0.38% (50th highest) | 0.89% |
| Average HO-3 premium (NAIC 2023) | $1,906 | $1,737 |
| Median household income | $66,659 | $81,604 |
| Median gross rent | $1,077 | $1,487 |
| Income needed at 28% (20% down) | $65,357 | – |
Frequently asked questions
When are Alabama property taxes due?
October 1. They become delinquent after December 31.
How much does Alabama's basic homestead exemption save?
It removes up to $4,000 of assessed value from state tax and $2,000 from county tax. In Madison County the county says the savings are typically about $48 a year, on top of the lower tax class.
Do seniors pay property tax in Alabama?
Owners 65 and older are exempt from the state portion. County taxes may still be due, depending on income.
What is the median-home payment in Alabama?
About $1,525.01 a month on a $233,300 home with 20% down at 7.40%, including tax and insurance.
Sources
- Alabama DOR, due dates
- Alabama DOR, homestead exemptions
- Alabama DOR, homestead exemptions
- Alabama DOR, recordation tax
- AHFA Step Up
- FHFA, 2026 conforming loan limits
- Census ACS 2024 1-year (B25077, B25103, B19013, B25064); NAIC homeowners report (2023); Freddie Mac PMMS.
See also: all states · house affordability · Alabama paycheck