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Arkansas vs Tennessee:
Mortgage & Housing Costs

Side-by-side comparison of mortgage costs, property taxes, closing costs, and homeowners insurance between Arkansas and Tennessee. Updated for 2026.

MetricArkansasTennessee
Median Home Price$195K$340K
Property Tax Rate0.62%0.56%
Avg Closing Costs$3K$5K
Closing Cost %1.5%1.5%
Transfer Tax0.33%0.37%
Homeowners Insurance$2,500/yr$2,400/yr
First-Time Buyer Program
ADFA Down Payment Assistance
Up to $15,000 DPA
THDA Great Choice Home Loan
Up to $25,000 DPA
Verdict

Arkansas wins 3 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 Tennessee. Both states offer first-time buyer programs — explore the state pages for full details.

Monthly Payment Comparison

Estimated PITI payments assuming 10% down, 6.5% rate, 30-year fixed mortgage with PMI.

Arkansas
Home Price$195,000
Down Payment (10%)$19,500
Loan Amount$175,500
Monthly P&I$1,109
Monthly Property Tax$101
Monthly Insurance$208
Monthly PMI$73
Total PITI$1,491/mo
Annual property tax: $1,209
Tennessee
Home Price$340,000
Down Payment (10%)$34,000
Loan Amount$306,000
Monthly P&I$1,934
Monthly Property Tax$159
Monthly Insurance$200
Monthly PMI$128
Total PITI$2,420/mo
Annual property tax: $1,904

The monthly payment difference is $929/month — that’s $11,148/year or $334K 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.

Income Needed to Buy

Based on the 28% debt-to-income rule — your monthly housing payment should not exceed 28% of gross monthly income.

Arkansas
$64K/yr
minimum household income
Tennessee
$104K/yr
minimum household income

To afford the median home in Tennessee, you need a household income of approximately $104K/year. In Arkansas, you need $64K/year — less by $40K/year. That $40K income gap means Arkansas is accessible to a significantly wider range of households.

Which State Is Right for You?

Arkansas offers meaningfully lower home prices than Tennessee, with median prices running 43% less ($145K difference). This gap translates to both a smaller loan and lower monthly payments. First-time buyers priced out of Tennessee may find Arkansas far more accessible, particularly when combined with local down payment assistance programs.

Property tax rates are similar in both states (Arkansas: 0.62%, Tennessee: 0.56%), so taxes shouldn't be the deciding factor in your relocation decision. Instead, focus on differences in home prices, insurance costs, and state-specific programs. Both states collect roughly comparable property tax revenue relative to home values.

Both states offer down payment assistance for first-time buyers. Arkansas's ADFA Down Payment Assistance provides Up to $15,000 DPA, while Tennessee's THDA Great Choice Home Loan offers Up to $25,000 DPA. 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.

Key Takeaway

The bottom line: Arkansas homes cost $145K less than Tennessee on average. That translates to roughly $929 less per month in total housing costs if you choose Arkansas. For most buyers, this price gap is the single biggest factor — it affects your loan size, monthly payment, and how quickly you build equity.

Compare Other States

Arkansas vs Alabama →Arkansas vs Florida →Arkansas vs Georgia →Tennessee vs Alabama →Tennessee vs Alaska →Tennessee vs Arizona →

Frequently Asked Questions

Is it cheaper to buy a home in Arkansas or Tennessee?
Arkansas is cheaper overall. The median home costs $195K compared to $340K in Tennessee, and the total monthly PITI payment is $1,491 versus $2,420. That works out to $929 less per month or $11,148 less per year in Arkansas.
How much more are property taxes in Arkansas vs Tennessee?
Arkansas has a property tax rate of 0.62% compared to 0.56% in Tennessee. On the median home, that means Arkansas homeowners pay approximately $1,209/year in property taxes versus $1,904/year in Tennessee — a difference of $695/year.
Which state has better first-time buyer programs, Arkansas or Tennessee?
Arkansas offers the ADFA Down Payment Assistance (Up to $15,000 DPA), while Tennessee has the THDA Great Choice Home Loan (Up to $25,000 DPA). Both programs aim to reduce upfront costs for first-time buyers. Eligibility depends on income limits, purchase price caps, and other criteria set by each state's housing finance agency.

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