As of October, 2018, the average rent for an apartment in Honolulu, Hawaii was $1,680.00 according to RentJungle.com.

That’s quite a decrease from where it was this time last year: $2,123.00 according to the same source – down 26.37%. We suspect a data glitch somewhere, though, and that the real figure is close to about $2,000 per month. But RentJungle shows the average monthly rental payment for a 2-bedroom apartment as of October 2018 was 1,836.00 – not too far from our best guess.


Hawaii Housing Facts
For the 10-year period from 2007-2017, median rent prices in Honolulu rose 20.1 percent.


If you’re getting tired of making your landlord wealthy instead of yourself, you might be wondering how much house you can buy for that money.

Let’s find out.

According to Bankrate.com, today’s average mortgage rate is 4.88 percent. So using that as our basis for calculation, here’s what $2,000.00 per month will buy:

Down payment Monthly mortgage payment Total mortgage amount
0% $2,000 $287,284
3.5% $2,000 $295,140
10% $2,000 $310,932
20% $2,000 $364,557

We chose the down payment amounts shown because those are important thresholds in the mortgage world:

  • Veterans qualifying for a VA home loan can buy with no down payment;
  • FHA loans generally require a 3.5 percent down payment;
  • Conventional mortgages generally require a minimum down payment of 10 percent;
  • The minimum down payment to avoid having to pay private mortgage insurance is 20 percent.

The amounts above are a stripped-down estimate. As a homeowner, you’ll also need to take into account homeowners, flood, and windstorm insurance, which will likely run $100-200 per month. And if you are putting less than 20% down, you’ll also need to pay private mortgage insurance (PMI).

Home ownership also means property taxes, which vary quite a bit by island. On Oahu, your tax rate will be $3.50 per $1,000 of “net taxable value,” or about $873 per year ($72.75/month) on a $300,000 home. In Maui County, you will probably pay $519 per year ($43.25/month) in property taxes on a $300,000 home; and on the Big Island, $816 per year ($68/month).

The property taxes can vary somewhat depending on whether you qualify for additional property tax exemptions based on age, income, disability or other factors, but given an assessed value of $300,000, these figures are a good estimate.

How much can you borrow? Here are some rough numbers, again assuming today’s average 4.88 percent interest rate, and subtracting a very approximate $130 for PMI and $250 for taxes and insurance.

Down payment Monthly mortgage payment Total mortgage amount
0% $1,620 $234,135
3.5% $1,620 $239,063
10% $1,620 $251,855
20%* $1,750 $318,989

*PMI not subtracted.

For a more precise estimate, using your own numbers, try our Rent vs. Buy Calculator on our site, and run the numbers yourself!

The good news: The monthly mortgage payment on a fixed loan won’t change for 30 years. That’s not going to be true for your rent. In fact, median rent prices in Honolulu rose by 20.1 percent between 2007 and 2017, while incomes rose by just half that amount.

Tax advantages for homeowners

Owning a home has tax advantages as well: You can deduct home mortgage interest (on mortgages of up to $750,000) and property taxes from income. You can’t deduct rent. And when you sell the home after living in it for at least 3 out of the previous 5 years, you can claim a capital gains tax exemption.

You can’t do that with other assets.

When considering what payment you can afford each month, you should consider a budget for unexpected repairs and maintenance. A good rule of thumb is to allocate about 1 percent of the value of a home for maintenance every year, or $1 per square foot per year. Assume a little more if the home is over 10 years old, or will need a new roof or other major repair shortly.

Also, look at any condo or homeowner’s association fees that may apply, as well as trash pickup, sewer and other costs your landlord may have been covering out of your rent for which you will now, as a homeowner, be responsible.

Apply now

If home ownership has been on your mind, now’s a great time to buy. It’s easier to qualify for a home loan than it was just a few years ago, and interest rates are still relatively low on a historical basis.

Call us today to get started, or fill out our online application to get pre-qualified so you can start shopping for your dream home!

Mahalo from all of us at Pacific Home Loans!

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