Alaska Mortgage Calculator
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If you've been looking for the ultimate adventure, the most extreme vacation house, or just a quiet place to call home, Alaska may be calling you. Although the housing market is small, the state is huge, and there are lots of wild places to explore if you're really into snow and ice. Use our Alaska mortgage calculator to figure out just what you can afford.
If you've been looking for the ultimate adventure, the most extreme vacation house, or just a quiet place to call home, Alaska may be calling you. Although the housing market is small, the state is huge, and there are lots of wild places to explore if you're really into snow and ice. Use our Alaska mortgage calculator to figure out just what you can afford.
Some people may be shocked to learn that Alaska has a housing market at all, and although it is small, it is active. In fact, Alaskans have seen an average 9.8% year-over-year growth in median sales prices for homes between December 2022 and December 2023. December 2023's median sales price was $370,700, not really much lower than the national housing market's median sales price of $402,646 for the same period.
Perhaps not surprisingly, the housing supply in Alaska is very limited, but has been much more decidedly so since July 2020, when the state saw its first dip into a two-month supply in recent memory. Since then, supply has hovered between one and two months consistently. This likely accounts for the median days on market of just 32 days in December 2023, down a full week year over year, and a whopping 22.6% of Alaska houses selling above their listing prices during the same period.
Alaska can be a hotly competitive market, which might seem surprising, but if you consider the difficulty of moving to Alaska and living in portions of the state, you'll understand that people go there on purpose. Few people are relocated to Alaska, or move there to be close to family; rather, they go because they want to be a part of what this majestic state has to offer -- and are willing to pay what it takes. Because of this, it's a good idea to touch base with your favorite mortgage lenders before starting your hunt for the best house in Alaska.
Here's a quick peek at some of the most important Alaska markets and how things are doing there.
| Metropolitan Area | Median Home Value | 1-Year Change |
|---|---|---|
| Anchorage | $379,000 | 8.3% |
| Fairbanks North Star Borough | $352,450 | 21.6% |
| Juneau | $665,000 | 13.1% |
| Kenai Peninsula Borough | $332,000 | 9.8% |
| Matanuska-Susitna Borough | $376,000 | 2.0% |
Calculating a mortgage payment by hand can be incredibly tedious, since the component parts will change every month (though the base total is the same). But if you're so inclined to do it, you'll need the following information: your principal amount for the month you're calculating, the interest rate, and how many months remain in your term. Then, simply follow the formula below:
Your basic mortgage payment, made up of just your principal and interest charges (often known simply as "PI" or "P+I") is the result at the end of this calculation. As stated above, the payment is the same each month, but the allocation of interest and principal is different each month, with increasingly more principal being added into the payment as your balance decreases and interest charges become less. However, your actual monthly mortgage payment consists of more than just P+I.
This is why it's often just easier to use a mortgage calculator like this one to do the math for you.
Mortgage payments typically also include principal, interest, real estate taxes, and homeowners insurance. This is commonly called PITI (see how that works?). Sometimes, extra fees like homeowners association (HOA) assessments are also included in the mortgage payment, as well as additional insurance for related natural disasters. In addition, if you have a smaller than 20% down payment like most Americans, you will likely also have to pay for mortgage insurance. This is private mortgage insurance (PMI) on a conventional loan. For an FHA loan, it'll be mortgage insurance premium (MIP).
To calculate your new mortgage with these additional expenses included, just click "show additional inputs" on the mortgage calculator above and add your estimated figures. It will get you a very close estimate of what to expect.
Alaska home prices are more or less in line with the national average, which may surprise some folks, but the taxes homeowners pay are definitely above average. In fact, Alaska is ranked No. 13 in highest property taxes as of the writing of this article. On average, the counties collect 1.04% of a property's fair assessed market value each year in taxes. This means that if your home was assessed at $232,900, you'd pay $2,422 in taxes. Anchorage has the highest tax rate in the state, at 1.32%
Despite the higher taxes, Alaskans also benefit from the Alaska Permanent Fund Dividend, which is a payment every eligible resident of the state receives as a portion of their share of the state's mineral royalties for the year. In 2023, the dividend was $1,312.
Alaska is at the forefront of climate change, with its exposure to melting sea ice and extreme latitude. It's actually warning at two to three times the rate of global climate change, which is shrinking glaciers, thawing permafrost, and increasing precipitation that falls as rain instead of snow. Higher temperatures are also contributing to fish kills and wildfires.
If you're considering a move to Alaska, ask very pointed questions about the region you intend to occupy. You may need coverage beyond your basic homeowners insurance policy, such as flood or wildfire insurance, for the specific location where you'll be moving. These optional coverages can save you a lot of money and headache, should climate change continue to intensify these types of natural phenomena.
With all the right quotes in hand, you'll be able to plug your total insurance premiums into the Alaska mortgage calculator to help give you a better estimate of your overall payment.
Alaska has two first-time home buyer programs available through the Alaska Housing Finance Corporation (AHFC) to assist residents in becoming homeowners. Here's a rundown of the two main programs. You can find more information on the agency's website.
The First Home program offers a reduced interest rate to borrowers who qualify. There are no income limits or maximums on the property's price.
To qualify for this program, Alaska residents must:
Some home buyers will additionally qualify for a program called First Home Limited. It's very similar to First Home, also offering an interest-reduced loan, but with several caveats.
To qualify for this program, Alaska residents must:
It's important to understand that this loan may be subject to federal recapture tax, since the low interest rate is made possible by tax-exempt municipal bonds. You'll want to check with a tax expert to understand what your responsibility is and under what circumstances it will apply.
In the past, Alaska has offered closing cost assistance, but does not currently have any funding available for this program. At the time it was available, however, the state offered up to 4% of the principal amount of the mortgage in the form of assistance that could be used for a down payment or closing costs. This program was meant to work with FHA, VA, or USDA mortgages on primary residences.
Although not currently active, this program could become available at any time, so ask about it if you're in need of additional assistance from the state of Alaska.
Whether or not you qualify for a home mortgage purchase program in Alaska, you can still apply for other loans with appealing terms for first timers. If you're a veteran, you may qualify for a VA loan, which has a zero down payment option, or in many parts of Alaska, a USDA loan may be an option -- these programs vary, but generally have pretty generous terms.
As in other parts of the country, FHA loans or conventional loans are also available. Both have low down payment requirements, making them easier to secure, and can be used on a vast array of homes.
In order to qualify for any mortgage, you'll want to work hard to make yourself into the best candidate possible. Here are a few tips:
In addition, guard your credit carefully by not opening any new accounts or applying for credit too soon before your loan application. Each time you apply or open a new credit account, your credit will take a little hit. Inquiries take two years to fall off your credit report, so plan accordingly.
Alaska doesn't have any down payment assistance programs through the state right now, but it does have many tracts that qualify for USDA loans, which can have very generous terms and low to no down payment options. VA loans are also a zero-down option if you've served in the military. Otherwise, conventional mortgages typically only require 3% down, and FHA mortgages just 3.5%.
Alaska closing costs are relatively inexpensive compared to the homes available there. On average, a purchase mortgage will cost about $3,581 in closing costs and a refinance will require you to supply about $2,671.
Homeowners insurance on a $400,000 home in Alaska will run you about $2,525, which is 22% below the national average. However, as climate change accelerates, many parts of Alaska will be affected, and your home may require additional coverage for fire, flood, and other excluded hazards.
Alaska is 13th in the nation for most expensive taxes. On average, Alaskans pay 1.04% of their property's assessed value in taxes each year.
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Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
