Iowa Mortgage Calculator
Iowa taxes only a fraction of your home’s value, a fraction that changes annually, and a major 2026 law just replaced the homestead credit with a new exemption — pick your county below to see your real payment.
Loan & Property Details
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Your Estimated Monthly Payment
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What If You Paid Extra Toward Principal?
Slide to test an extra monthly payment and see how many years and how much interest it saves.
What If Your Rate Changes?
Your 5-Year Equity Snapshot
Good to Know: What a Seller Pays (Real Estate Transfer Tax)
You won’t pay this as a buyer, but it’s worth understanding since you’ll be a seller someday.
| Statewide transfer tax rate | $1.60 per $1,000 of sale price (about 0.16%) |
| Who customarily pays | Seller, at closing |
| Example on a $275,000 sale | $275,000 ÷ $1,000 × $1.60 = $440 |
| Exemption | The first $500 of a sale price is exempt |
Iowa’s “Rollback” System, and the Big Change Coming in 2026
Iowa assesses homes at 100% of market value, but only a fraction of that value is ever actually taxed. Every year, the Iowa Department of Revenue calculates a statewide residential “rollback” ratio designed to keep aggregate residential taxable value from growing more than 3% a year across the entire state. For 2026, that ratio sits in the mid-40s percent, meaning less than half your home’s assessed value is subject to tax before any levy rate is applied. It’s a genuinely unusual mechanism: unlike a fixed assessment ratio, Iowa’s rollback moves up or down annually depending on how fast home values are rising statewide, so the fraction that gets taxed today may not be the same fraction next year.
Polk, Linn, Scott, and Johnson: how the four biggest counties compare
Polk County, home to Des Moines and its suburbs, runs the highest effective property tax rate of Iowa’s largest counties. Linn County, covering Cedar Rapids, runs close behind. Scott County, home to Davenport, runs a comparatively moderate rate. Johnson County, home to Iowa City and the University of Iowa, posts Iowa’s highest median property tax bill in dollar terms, driven by a combination of above-average home values and above-average school district millage. Switching counties above resets both price and rate defaults to match.
A major 2026 law just replaced the homestead credit with an exemption
For years, Iowa’s Homestead Tax Credit worked as a state-funded reimbursement to local governments covering a modest amount, commonly cited around $150 to $200 a year, on an owner-occupied primary residence. That changed with SF 2472, signed into law on May 18, 2026: starting with assessment year 2026, the credit is replaced with a Homestead Tax Exemption equal to 10% of a home’s taxable value, with a floor of $5,500 and a ceiling of $20,000 in exempted value, the ceiling adjusted for inflation in future years. Because of how Iowa’s tax calendar works, this change is retroactive to the 2026 assessment but won’t actually show up on a tax bill until the payments due in September 2027 and March 2028. If you’re budgeting a couple of years out, build in the larger benefit; if you’re looking at a bill due this year or next, the older, smaller credit is still what applies.
The Elderly and Disabled credit just got bigger too
The same 2026 legislation raised Iowa’s Elderly and Disabled Property Tax Credit from a maximum of $1,000 to $1,500 a year for qualifying low-income homeowners 65 and older or with a disability. Separately, a Military Exemption reduces assessed value by roughly $1,852 or more for eligible veterans, and some surviving spouses may also qualify. None of these are automatic; each requires an application through the county assessor.
Common Mistakes Iowa Buyers Make With the Numbers
- Applying a levy rate directly to full market value. Iowa’s rollback shields more than half of a typical home’s assessed value from taxation before any rate is applied.
- Assuming the new, larger Homestead Exemption applies to this year’s bill. It’s retroactive to the 2026 assessment year but doesn’t hit actual tax bills until September 2027 and March 2028.
- Not reapplying for the Elderly and Disabled Credit at the new, higher amount. Existing recipients should confirm the updated $1,500 cap is reflected on their bill.
- Forgetting the rollback ratio changes every year. A ratio that shields 55% of value this year could shield less next year if statewide values cool off.
- Confusing the transfer tax with an ongoing cost. It’s a modest, one-time, typically seller-paid closing charge, not a recurring bill like property tax.
Tips for Lowering Your Iowa Mortgage Payment
- File for the Homestead Credit (or the new exemption once it takes effect) with your county assessor as soon as you close.
- If a borrower on title is 65 or older or disabled and income-qualifies, confirm the updated $1,500 Elderly and Disabled Credit is reflected on your bill.
- If a veteran is on title, ask about the Military Exemption on top of the standard homestead relief.
- Compare rate quotes from at least three lenders active specifically in the Des Moines and Cedar Rapids markets, since local pricing can differ from national averages.
- Use the extra-payment scenario above; even a modest additional principal payment compounds meaningfully over a 30-year Iowa loan.
Frequently Asked Questions
What is Iowa’s property tax rollback?
An annually recalculated ratio that limits how much of a home’s assessed value is actually subject to tax, designed to keep aggregate statewide residential taxable value growth under 3% a year. For 2026, the ratio sits in the mid-40s percent.
Did Iowa change its homestead tax credit in 2026?
Yes, SF 2472, signed May 18, 2026, replaces the flat Homestead Tax Credit with a Homestead Tax Exemption equal to 10% of taxable value, between $5,500 and $20,000, retroactive to the 2026 assessment year but not reflected on bills until September 2027 and March 2028.
How much is property tax in Iowa?
Iowa’s effective property tax rate runs above the national average, with Polk and Linn counties posting the highest effective rates among the state’s largest counties.
What is Iowa’s Elderly and Disabled Property Tax Credit?
A state-funded credit for qualifying low-income homeowners 65 or older or disabled, increased from a $1,000 to a $1,500 annual maximum under 2026 legislation.
Does Iowa have a real estate transfer tax?
Yes, a state transfer tax of $1.60 per $1,000 of sale price, about 0.16%, customarily paid by the seller, with the first $500 of a sale price exempt.
Do veterans get a property tax break in Iowa?
Yes, the Military Exemption reduces assessed value by roughly $1,852 or more for eligible veterans, with some surviving spouses also qualifying.
Which Iowa county has the lowest property tax rate?
Among the state’s largest counties, Scott generally runs a lower effective rate than Polk, Linn, or Johnson.
What down payment do I need to buy a home in Iowa?
Conventional loans often start around 5% down, FHA loans typically require 3.5%, and VA loans can allow 0% down for eligible veterans.
When can I remove PMI on an Iowa home loan?
Federal law allows requesting PMI removal at 20% equity, with automatic lender cancellation at 22% equity based on the original amortization schedule.
Does this calculator include closing costs?
No, this tool estimates the ongoing monthly payment only. Iowa closing costs, including the modest transfer tax for sellers, typically add a small percentage of the purchase price.
References
- Iowa Department of Revenue, property tax rollback, Homestead Tax Credit/Exemption, and relief program guidance – revenue.iowa.gov
- Polk, Linn, Scott, and Johnson County Assessor offices, current combined levy rates – county government sites
- 2026 Iowa Acts, SF 2472 (homestead exemption and elderly/disabled credit changes)
- Freddie Mac Primary Mortgage Market Survey, weekly national rate averages – freddiemac.com/pmms
Related DexoCalc Tools
This Iowa mortgage calculator is part of the Mortgage Calculators cluster I am building out on DexoCalc. Start with the national Mortgage Calculator to compare Iowa against any other state, see another Midwest state with a distinctive tax-limiting mechanism in the Indiana Mortgage Calculator, compare a large owner-occupant deduction out west in the Idaho Mortgage Calculator, or check a state at the opposite tax extreme in the New Jersey Mortgage Calculator. Browse every state-specific tool as new ones publish on the full Mortgage Calculators hub.
This calculator provides estimates for educational purposes only and is not a loan offer, pre-approval, or substitute for advice from a licensed Iowa mortgage professional or tax advisor. Property tax, credit, and transfer tax figures are approximations that vary by county and by tax year during this transition; confirm exact figures with your county assessor. Sources: Iowa Department of Revenue, county assessor offices, Freddie Mac.