Cost of Living in Mexico

Mexico is cheaper than the United States, Canada or Western Europe. It is also meaningfully more expensive than it was two years ago, and most of the content telling you otherwise was written when the exchange rate was different. If you earn in dollars, the peso’s strength since 2024 has quietly cost you about a sixth of your purchasing power — which matters more to your monthly budget than any restaurant price on this page.

The exchange rate is part of your cost of living

Start here, because it is the fact that changes the arithmetic and almost nobody leads with it.

Date	Pesos per US dollar
End 2023	16.92
End 2024	20.27
End 2025	around 18.00 — the peso’s best year since 1994
August 2026	17.02

A dollar bought 20.3 pesos at the end of 2024 and buys 17.0 today. That is roughly a 16% loss of purchasing power for a dollar earner in twenty months, before Mexican inflation of 3 to 4% a year is added on top. A rent of 20,000 pesos cost about 990 dollars at the end of 2024 and costs about 1,175 dollars now, with the landlord having changed nothing.

This cuts directly against the “Mexico is incredibly cheap” genre, most of which was written during the weak-peso years. Mexico remains good value. It is not the bargain it was in 2022, and anyone budgeting from an older article is budgeting from a different country.

Where you live changes everything

The national statistics agency’s household income and expenditure survey is the best non-crowd-sourced comparison available. Average household spending nationally runs about 47,674 pesos a quarter. The spread between states is wide:

Most expensive	Quarterly household spend	Least expensive	Quarterly household spend
Mexico City	$66,383	Chiapas	$27,118
Querétaro	$61,593	Oaxaca	$34,107
Nuevo León	$59,192
Jalisco	$56,015
Baja California Sur	$55,939
Quintana Roo	$53,667

Five things drive that 2.45-fold gap, and four of them will affect you:

• Housing, which dominates. The national average home value reached 1.9 million pesos in mid-2026, up 7.3% in a year.
• Dollarised tourist economies. Los Cabos, Cancún, Puerto Vallarta and San Miguel de Allende price housing and services to foreign incomes, not local ones. This is the single biggest reason two people can report wildly different costs for “living in Mexico”.
• The border wage floor. The northern border minimum wage is 40% above the national rate, which lifts every price level with it.
• Nearshoring demand in Querétaro, Monterrey, Aguascalientes and the Bajío.
• Climate, through the electricity bill. See below — this is the one nobody warns you about.

A monthly budget for a couple

Treat this as a planning estimate rather than a survey result. It is anchored on national household spending data and adjusted for how foreign residents actually spend — more on rent, healthcare and eating out than the Mexican average, since most Mexican households own their homes outright.

Category	Lean	Comfortable	Upscale
Rent	$8,000	$18,000	$40,000
Utilities	$1,500	$3,000	$7,000
Groceries	$6,000	$10,000	$16,000
Transport	$1,500	$4,000	$9,000
Healthcare	$1,500	$4,500	$10,000
Eating out	$2,000	$6,000	$15,000
Monthly total	$20,500	$45,500	$97,000
Roughly, in US dollars	$1,205	$2,675	$5,700

Lean is a smaller interior city, no car, IMSS voluntary cover. Comfortable is a mid-size city, one car, private health insurance. Upscale is Polanco, a resort town, or two cars and domestic help.

For scale: the average Mexican household’s entire quarterly income is about 77,864 pesos, or roughly 26,000 a month, often across more than one earner. A “comfortable” expat budget is around 1.75 times what an average Mexican household lives on. That is worth sitting with, and it is why the polite answer to “is Mexico cheap?” is “for whom?”.

The electricity trap

This is the mistake foreign residents make most often, and it is expensive.

Domestic electricity from CFE is subsidised through a series of tariffs — 1, 1A, 1B, 1C, 1D, 1E, 1F — assigned by the summer temperature of your locality. Hotter places get a larger subsidised allowance because air conditioning is assumed. Each tariff has a consumption ceiling. CFE tracks a rolling average of your last twelve months, and if that average crosses the ceiling, your household is reclassified as DAC — Tarifa Doméstica de Alto Consumo — and the subsidy is withdrawn entirely.

Tariff	Zone	Monthly ceiling
1	Temperate — includes Mexico City, Guadalajara, Querétaro, San Miguel de Allende	250 kWh
1A	Mild warm	300 kWh
1B	Warm	400 kWh
1C	Medium warm	850 kWh
1D	High warm	1,000 kWh
1E	Extreme heat	2,000 kWh
1F	Extreme heat	2,500 kWh

One mid-size split unit run for several hours a day in summer adds roughly 300 to 600 kWh a month. In a temperate-zone town on Tariff 1, two summer months of air conditioning can push the twelve-month average over the line. Coastal cities get the larger allowances precisely because AC is expected — but households in Cancún, Mérida, Puerto Vallarta and Los Cabos running it continuously still cross into DAC routinely.

The cost difference is not marginal. Subsidised power runs well under two pesos a kWh; DAC is reported around six. Bills commonly triple or quadruple. And there is no fast way out — you must hold consumption below the threshold for twelve consecutive months before you can be reclassified.

Two practical rules follow. Ask for the last three CFE bills before signing a lease or buying, because a meter already sitting in DAC carries over to you. And if you are running AC seriously, price inverter units and solar into the decision from the start rather than after the first shocking bill.

Groceries: what is cheap, what is not

Genuinely cheap: seasonal fruit and vegetables, limes, avocados, tomatoes, onions, beans, rice, tortillas, eggs, chicken, pork, Mexican beer, tequila and mezcal, Mexican coffee, and anything eaten in a market.

Surprisingly expensive: imported cheese and European dairy, wine — imported bottles frequently run two to three times US shelf prices — breakfast cereals, peanut butter, olive oil, nappies, pet food, branded personal care, and electronics and appliances, which are often dearer than in the United States even before tax.

Where you shop matters more than in most countries. The consumer protection agency monitors a 24-item basic basket with a reference price around 910 pesos, and found a spread of 164 pesos between the cheapest and dearest chains in a single month. Its price monitoring consistently finds the centrales de abasto and markets cheapest on produce, eggs and meat, and Walmart the most expensive across most monitored items — pork at 66.50 pesos in one chain against 126.65 in another, eggs at 31.97 against 49.82. Costco and Sam’s Club are where most foreign residents end up for the imported half of the basket.

Wages, help and the other line items

The minimum wage rose 13% on 1 January 2026 to 315.04 pesos a day, with the northern border zone at 440.87. Monthly, that is roughly 9,450 and 13,225 pesos.

Domestic workers have their own higher professional minimum — 342.47 pesos a day, about 10,275 pesos a month full-time, and employers are legally required to enroll them in IMSS. Day rates for part-time help typically run 400 to 800 pesos depending on the city. This is one of the areas where foreign residents most often underpay through ignorance rather than intent.

Item	Monthly cost
Budget gym chains	$149–$399
Mid-range gym, all locations	$599–$700
Premium gym or CrossFit	$800–$2,000
Home internet, 100–250 Mbps	$350–$500
Full-time domestic help	$10,275 minimum

Private education deserves a warning of its own: tuition is inflating at around 6% a year, well above headline inflation, and has risen 19% cumulatively since 2023. If school fees are in your budget, index them upward.

One genuine bargain: property tax. Predial typically runs 0.25 to 0.5% of a cadastral value that is itself well below market value, so a home worth several million pesos often attracts a few thousand pesos a year. Mexican property taxes are among the lowest in the OECD.