Mortgage Guide for Florida

Mortgage rates are set by lenders and vary daily. This guide focuses on structural factors that affect your loan in Florida.

Insurance Costs Dominate the Payment Picture

Homeowners insurance in Florida averages approximately 0.59% of home value, but that figure understates the challenge. Actual premiums vary dramatically by location, construction type, roof age, and windstorm exposure. Coastal properties and older homes with non-hurricane-rated roofs can face premiums two to four times the state average. For a $404,000 home, baseline insurance adds roughly $199 per month to your mortgage payment, but borrowers in high-risk areas should budget substantially more. When lenders calculate your debt-to-income ratio, the full insurance cost counts against your qualifying income, which means Florida’s insurance market can significantly reduce the loan amount you qualify for compared to lower-risk states.

Citizens Property Insurance: Florida’s Insurer of Last Resort

Borrowers who cannot obtain coverage through private insurers may turn to Citizens Property Insurance Corporation, a state-created insurer of last resort. Citizens is required by law to be more expensive than comparable private market coverage, and it actively depopulates policies to private carriers. Following legislative reforms in 2022 and 2023, Citizens’ policy count has dropped significantly as private insurers re-entered the Florida market. For mortgage borrowers, a Citizens policy satisfies lender insurance requirements, but the premium structure typically results in higher monthly payments. Additionally, all Florida property insurance policyholders can be assessed surcharges to cover Citizens’ losses after catastrophic hurricanes, creating an ongoing structural cost of Florida homeownership that does not appear in standard insurance quotes.

Flood Insurance Adds Another Layer

Florida leads the nation in National Flood Insurance Program policies in force. Lenders require flood insurance for any property in a FEMA Special Flood Hazard Area (zones A, AE, V, or VE), and Florida has extensive flood zone designations along both coasts and inland waterways. Average NFIP premiums in Florida run approximately $781 per year, but costs range from under $400 in low-risk zones to several thousand in high-risk coastal areas . Beginning in 2023, Citizens policyholders are being phased into mandatory flood insurance requirements regardless of flood zone designation, with full implementation by 2027. Combined with standard homeowners insurance, total annual insurance costs for a Florida home in a flood zone can exceed $5,000 to $7,000, which materially reduces qualifying loan amounts.

Homestead Exemption and Save Our Homes: Property Tax Implications

Florida’s effective property tax rate of approximately 0.86% is below the national median, and the state’s homestead exemption further reduces the tax burden for primary residence owners. The standard homestead exemption removes up to $50,000 from assessed value for qualifying homeowners, with an additional inflation-adjusted exemption that brought the total to approximately $50,722 in 2025 . The Save Our Homes amendment caps annual assessed value increases at 3% or the change in CPI, whichever is less. This cap significantly benefits long-term owners but resets to full market value upon sale. For mortgage borrowers, this means the property tax you see on the seller’s statement may be substantially lower than what you will owe after purchase. Lenders estimate taxes based on post-sale assessed value, not the seller’s capped amount, which can result in higher escrow payments than buyers expect. Homestead portability allows transferring accumulated Save Our Homes savings to a new Florida homestead within three years of sale, but the process requires a separate application and is not automatic.

Documentary Stamp Tax and Closing Costs

Florida imposes a documentary stamp tax on deeds at $0.70 per $100 of the sale price in all counties except Miami-Dade. Buyers also owe documentary stamps on the mortgage note ($0.35 per $100) and a one-time nonrecurring intangible tax of 0.20% of the mortgage amount. On a $404,000 purchase with a $363,600 loan (10% down), the combined transfer-related taxes total approximately $4,273: deed stamps of $2,828 (seller typically pays), mortgage stamps of $1,273 (buyer pays), and intangible tax of $727 (buyer pays). The intangible tax is waived for VA borrowers. Title insurance premiums in Florida are promulgated (state-regulated), and which party pays for title insurance varies by county: the seller customarily pays in most of the state, but the buyer pays in Miami-Dade, Broward, Collier, and Sarasota counties.

No State Income Tax

Florida has no personal state income tax, which increases take-home pay compared to income-tax states. However, lenders use gross income to calculate debt-to-income ratios, so the tax advantage does not directly increase qualifying loan amounts. The benefit shows up in cash flow: more take-home pay means more available for down payment savings, closing costs, and monthly payment cushion after closing.

Conforming Limits and High-Cost Exception

Most Florida counties use the baseline conforming loan limit set by FHFA. Monroe County (the Florida Keys) is the only designated high-cost county in the state, with a 2026 conforming limit of $990,150 for a single-unit property . FHA loan limits also vary: most Florida counties use the floor limit, but Miami-Dade, Broward, and Palm Beach counties have elevated FHA limits reflecting higher area home prices . Given Florida’s median home price of approximately $404,000, many purchases in major metro areas approach or exceed the FHA floor, making conventional conforming loans or FHA high-balance loans the more common financing path.

State Programs Offer Meaningful Assistance

The Florida Housing Finance Corporation administers several down payment assistance programs. These include the Florida Assist program (a $10,000 deferred second mortgage at 0% interest), the HFA Preferred and HFA Advantage PLUS programs (forgivable second mortgages of 3% to 5% of the loan amount, forgiven over five years), and the Hometown Heroes program (deferred second mortgage up to 5% of the first mortgage or $35,000, available to all employed Florida residents) . The Salute Our Soldiers program offers similar DPA options specifically for active military and veterans. Most programs require a minimum 640 credit score, income below county-specific limits, and completion of an 8-hour homebuyer education course.

What This Means for Your Monthly Payment

On a $404,000 Florida home with 10% down ($363,600 loan) at a 6.5% interest rate, estimated monthly costs break down as follows: principal and interest of approximately $2,298, property tax escrow of approximately $290 (after homestead exemption), homeowners insurance of approximately $199, and PMI of approximately $152 (assuming 0.5% PMI rate). The total estimated monthly payment is approximately $2,939 before flood insurance. If the property is in a flood zone, add $65 to $300 or more per month for flood insurance, bringing the total to $3,004 to $3,239 or higher. Insurance components alone can account for 10% to 15% of the total payment in high-risk areas. PMI rates vary by credit score, loan-to-value ratio, and insurer, so your actual cost may differ from this estimate.