Side-by-side comparison of mortgage costs, property taxes, closing costs, and homeowners insurance between Arkansas and Illinois. Updated for 2026.
Arkansas wins 4 of 6 cost categories, making it the more affordable state for homebuyers overall. With a median home price of $195K and lower overall costs, Arkansas offers meaningful savings compared to Illinois. Both states offer first-time buyer programs — explore the state pages for full details.
Estimated PITI payments assuming 10% down, 6.5% rate, 30-year fixed mortgage with PMI.
The monthly payment difference is $770/month — that’s $9,240/year or $277K over the life of a 30-year loan. Buying in Arkansas is the more affordable option based on median home prices with identical loan terms.
Based on the 28% debt-to-income rule — your monthly housing payment should not exceed 28% of gross monthly income.
To afford the median home in Illinois, you need a household income of approximately $97K/year. In Arkansas, you need $64K/year — less by $33K/year. That $33K income gap means Arkansas is accessible to a significantly wider range of households.
Arkansas offers meaningfully lower home prices than Illinois, with median prices running 28% less ($75K difference). This gap translates to both a smaller loan and lower monthly payments. First-time buyers priced out of Illinois may find Arkansas far more accessible, particularly when combined with local down payment assistance programs.
Property taxes are dramatically different: Arkansas charges 0.62% while Illinois charges 2.07%, a gap of 1.45 percentage points. On the respective median homes, this means Illinois homeowners pay roughly $5,589 per year in property taxes versus $1,209 in Arkansas. Over 30 years of homeownership, this difference alone can add up to six figures. Retirees on fixed incomes should weigh this heavily.
Insurance costs favor Illinois at $1,900/year versus $2,500/year in Arkansas, a difference of $600 annually. While not the largest cost factor, this adds up to over $6K over a decade of homeownership. Shop multiple carriers in either state — actual premiums depend on your specific property, coverage level, and claims history.
Both states offer down payment assistance for first-time buyers. Arkansas's ADFA Down Payment Assistance provides Up to $15,000 DPA, while Illinois's IHDA 1stHomeIllinois offers $7,500 forgivable loan. These programs can significantly reduce your upfront costs and make homeownership accessible even if you haven't saved a full 20% down payment. Check eligibility requirements on each state's housing finance agency website — income limits and purchase price caps apply.
The bottom line: property taxes are the defining difference here. Illinois's 2.07% rate versus Arkansas's 0.62% means Arkansas homeowners save approximately $4,380 every year on taxes alone. Over a 30-year mortgage, that difference compounds into tens of thousands of dollars — making it the most important cost factor in this comparison.