Is it cheaper to live in Lexington or Montgomery?

Montgomery, AL is cheaper. Its monthly baseline of $1,020 (1BR rent + utilities) runs about 6% below Lexington, KY's $1,080, mainly because of rent.

How much more do you need to earn to live in Lexington than in Montgomery?

To keep rent near the recommended 30% of gross income, you'd want to earn roughly $35,000 a year in Lexington versus $33,000 in Montgomery.

Which has lower taxes, Lexington or Montgomery?

Lexington is taxed under Kentucky's rules (a top state income tax rate of 3.50% and a 6% state sales tax); Montgomery under Alabama's (a top state income tax rate of 5.00% and a 4% state sales tax).

Lexington vs Montgomery Cost of Living 2026

Lexington

Kentucky

$1,080/mo est.

Montgomery

Alabama

$1,020/mo est.

Monthly estimate = 1BR rent + electricity + gas

A one-person monthly baseline (1BR rent plus typical utilities) runs $1,080 in Lexington, KY versus $1,020 in Montgomery, AL. Overall, Montgomery, AL is roughly 6% cheaper to live in day-to-day than Lexington, KY, driven mainly by rent.

Median household income is $67,631 in Lexington, KY and $55,687 in Montgomery, AL — about 18% higher in Lexington, KY. Kentucky has a top state income tax rate of 3.50% and a 6% state sales tax; Alabama has a top state income tax rate of 5.00% and a 4% state sales tax.

Lexington, KY

Montgomery, AL

Rent

Studio

$769

$864

+12% in Montgomery, AL

1 Bedroom

$887

$831

+6% in Lexington, KY

2 Bedroom

$1,119

$982

+12% in Lexington, KY

3 Bedroom

$1,408

$1,172

+17% in Lexington, KY

Buying a Home

Median Home Value

$272,100

$148,500

+45% in Lexington, KY

Income

Median Household Income

$67,631

$55,687

+18% in Lexington, KY

Metro Median Wage (annual)

$48,620

$44,950

+8% in Lexington, KY

People & Lifestyle

Median Age

35.2 yr

36.2 yr

+1.0 yr in Montgomery, AL

Homeownership

53.6%

54.3%

+0.7 pp in Montgomery, AL

Bachelor's+ (25+)

47.3%

33.5%

+13.8 pp in Lexington, KY

Avg Commute

20.8 min

20.5 min

+0.3 min in Lexington, KY

Crime (per 100k/yr)

Violent Crime

269.1

605.5

+125% in Montgomery, AL

Property Crime

2,304.4

2,258.3

+2% in Lexington, KY

FBI Crime Data Explorer. Offenses per 100,000 residents per year; agency reporting practices vary, so this is approximate.

Climate

Avg Annual Temperature

55.6°F

65.1°F

+9.5°F in Montgomery, AL

Annual Precipitation

45.2 in

53.1 in

+7.9 in in Montgomery, AL

Gas

Regular Gasoline

$3.85/gal

$3.62/gal

+6% in Lexington, KY

Area: Midwest (PADD 2) vs Gulf Coast (PADD 3).

Utilities

Electricity (¢/kWh)

14.3

16.4

+15% in Montgomery, AL

Natural Gas ($/MCF)

$33.20

$24.06

+28% in Lexington, KY

Residential, state-level averages (EIA). MCF = 1,000 cubic feet.

Groceries

Milk (gal)

$4.00

about equal

Bread (lb)

$1.75

about equal

Eggs (doz)

$2.21

about equal

Ground Beef (lb)

$6.45

about equal

Chicken (lb)

$1.90

about equal

Bananas (lb)

$0.62

about equal

Average prices — South vs South (BLS). Regional where available, otherwise U.S. average.

State Taxes

Sales Tax (KY / AL)

+2.0 pp in KY

Income Tax (top rate)

3.50%

5.00%

+1.5 pp in AL

Lexington vs Montgomery — FAQ

Is it cheaper to live in Lexington or Montgomery?: Montgomery, AL is cheaper. Its monthly baseline of $1,020 (1BR rent + utilities) runs about 6% below Lexington, KY's $1,080, mainly because of rent.
How much more do you need to earn to live in Lexington than in Montgomery?: To keep rent near the recommended 30% of gross income, you'd want to earn roughly $35,000 a year in Lexington versus $33,000 in Montgomery.
Which has lower taxes, Lexington or Montgomery?: Lexington is taxed under Kentucky's rules (a top state income tax rate of 3.50% and a 6% state sales tax); Montgomery under Alabama's (a top state income tax rate of 5.00% and a 4% state sales tax).

Sources: US Census Bureau, ACS 5-Year (rent, income, home value, demographics); NOAA Climate Normals 1981–2010 (climate); EIA weekly retail (gas); Tax Foundation 2026 (state taxes).