Moving to Mexico from the US for a lower cost of living, a warmer climate, and a more relaxed lifestyle is becoming a reality for thousands of Americans choosing Mexico as their new home. With its affordable living expenses, world-class healthcare, delicious cuisine, and vibrant culture, living in Mexico as an American continues to rank among the top destinations for expats.

But just how much cheaper is it to live in Mexico compared to the U.S.? In this in-depth guide, we break down the cost of living in Mexico vs. the USA in 2025, covering essential expenses like housing, food, healthcare, utilities, transportation, and lifestyle costs. We’ll also provide practical money-saving tips for expats, discuss potential challenges, and explore how to make the most of your new life in Mexico.

By the end of this article, you’ll have a clear picture of how much money you could save by making the move and how to do it successfully!

Currency Exchange and Cost Adjustments in 2025

Understanding the currency exchange rate is crucial when comparing costs between the U.S. and Mexico.

How Much Does it Cost to Live in Mexico in 2025?

As of March 2025, the exchange rate fluctuates at slightly above 20.40 MXN per 1 USD.

This means that $1,000 USD equals approximately 20,400 MXN.

Fluctuations in the exchange rate can impact your purchasing power, so it’s wise to monitor rates before large transactions like rent payments or real estate purchases. This is important more so with rising tariffs in both countries.

*How the Exchange Rate Affects Expenses

If you're earning in U.S. dollars (such as through a remote job, pension, or investments), your money will generally go further in Mexico. However, if you earn in pesos, local salaries tend to be lower, so it's essential to budget wisely.

💡Pro Tip:

Use international banking services like Wise or Revolut to transfer money at lower fees and better exchange rates compared to traditional banks.

Housing Costs: Rent and Real Estate in Mexico vs. USA

How much does it cost to live in Mexico in 2025? When considering real estate in Mexico for expats, housing is one of the biggest areas of savings. Whether you rent or buy, you’ll find that your money goes much further compared to the U.S.These are affordable cities to retire in Mexico.

Rent Prices: Mexico vs. USA (2025)

Why Is Rent Cheaper in Mexico?

There are several key reasons why renting a home or apartment in Mexico is significantly more affordable than in the United States.

First, lower property values and reduced taxes contribute to Mexico’s affordable rental market. In the U.S., property prices have soared in recent years, especially in major metropolitan areas, making homeownership and rental costs skyrocket. In contrast, Mexico's real estate market remains far more accessible, with housing prices that are often 50-75% lower than those in American cities. Additionally, property taxes in Mexico are minimal compared to the U.S., where homeowners often pay thousands of dollars annually. Since landlords don’t face the burden of high property taxes, they can afford to offer rentals at much lower rates.

Another important factor is that Mexico has fewer government regulations on rental pricing compared to many U.S. cities. In places like New York, San Francisco, and Los Angeles, strict rent control laws and regulations have led to housing shortages and artificially inflated prices in certain areas. In Mexico, the rental market is much more flexible, allowing landlords to set competitive prices based on demand without excessive restrictions.

Finally, a high demand for short-term rentals among tourists and digital nomads helps to keep long-term lease prices relatively low. Many foreigners who move to Mexico for extended stays prefer to rent short-term Airbnb-style apartments, which can be priced at a premium. This allows landlords to subsidize their income through short-term rentals while keeping longer-term lease agreements more affordable for expats and locals who commit to multi-month or yearly contracts. As a result, expats willing to sign a long-term lease (6-12 months or more) can often negotiate lower rent prices, sometimes even including perks like utilities or furnished units at no extra cost.

In summary, Mexico’s lower property values, minimal taxes, flexible rental market, and the balance between short-term and long-term rental demand all contribute to significantly cheaper rent compared to the United States

Buying Property in Mexico

Many expats choose to buy rather than rent due to low real estate prices. Buying property in Mexico as a foreigner requires the use of a fideicomiso (bank trust) when purchasing property in coastal areas. These are needed for many investment properties in Mexico and beachfront properties for sale.

💡Pro Tip:

When renting or buying, always visit the property in person and negotiate prices, as landlords often list higher prices for foreigners. With many expats living in Mexico, landlords typically will give inflated prices to tourists.

Looking for a Trusted Real Estate Agent in Mexico?

At Orové Properties

We specialize in helping international buyers and expats find their ideal home in Mexico. Whether you're searching for a luxurious 4-bedroom Hacienda, a modern beachfront condo, or an investment property, our expert team is here to negotiate the best deals and ensure a smooth, stress-free transaction.

Price per Square Footage per Property

With extensive experience representing clients worldwide, we take pride in providing personalized real estate services tailored to your unique needs. Let us help you make your transition to Mexico seamless and hassle-free.

📩 Contact us today to start your property search with confidence!

3. Food and Dining Costs: How Much Can You Save on Groceries and Eating Out?

One of the biggest perks of living in Mexico is the affordability and quality of food. Whether you enjoy cooking at home or dining out, you’ll find that your food budget can be significantly lower than in the U.S.—without sacrificing quality or variety. Fresh, locally sourced ingredients are widely available, and dining at restaurants, even in tourist-friendly areas, is much cheaper than in major American cities.

Mexico is known for its vibrant food culture, with an abundance of traditional markets (mercados), street food stalls, and restaurants catering to all budgets. From organic fruits and vegetables to freshly caught seafood, you’ll be able to eat well without breaking the bank.

Grocery Price Comparison (2025)

If you prefer home cooking, you’ll be happy to know that groceries in Mexico are generally 40-60% cheaper than in the U.S., depending on the item and location.

These savings add up quickly, making it possible to maintain a healthy diet for a fraction of the cost. Additionally, in Mexico, you’ll find an abundance of tropical fruits like mangoes, papayas, avocados, and pineapples at incredibly low prices—something that is often considered a luxury in the U.S.

Dining Out: Restaurants and Street Food

One of the biggest joys of living in Mexico is eating out without guilt. Dining at restaurants is so affordable that many expats find themselves eating out more often than cooking at home. Whether you're grabbing a quick bite from a street vendor or enjoying a three-course meal at a fine dining restaurant, you'll be amazed at how much cheaper everything is compared to the U.S.

Mexico’s food culture offers something for every budget and taste, from small family-run restaurants (fondas) serving delicious home-style meals for just a few dollars to high-end restaurants where a full-course meal with drinks still costs less than a basic dinner in the U.S.

Why Is Food So Affordable in Mexico?

1. Locally Sourced Ingredients

Mexico produces a vast majority of its own fruits, vegetables, meats, and dairy products, keeping costs low.

Many items that are imported in the U.S. (like avocados, tomatoes, and limes) are grown domestically in Mexico, reducing transportation and import costs.

2. Lower Labor Costs

Restaurant labor costs in Mexico are much lower than in the U.S., allowing eateries to keep menu prices affordable while still paying fair wages.

3. Street Food Culture

Unlike in the U.S., where food trucks and street vendors are heavily regulated and often expensive, Mexico’s street food culture thrives, providing delicious, inexpensive meals made fresh daily.

4. Less Industrialization in the Food Industry

Unlike the U.S., where heavily processed and packaged foods dominate supermarket shelves, fresh food is the norm in Mexico, often costing less than processed alternatives.

💡Pro Tips for Eating Well on a Budget in Mexico

Shop at Local Markets (Mercados)

Traditional markets offer fresh produce, meats, and cheeses at lower prices than supermarkets.
You’ll also find fresh tortillas, handmade salsas, and specialty items that are cheaper and more authentic than grocery store versions.

Take Advantage of "Comida Corrida" (Daily Lunch Specials)

Many restaurants offer fixed-price menus that include a full meal (starter, main dish, dessert, and drink) for $4-$7 USD.

These are some of the best deals you’ll find for eating out!

Avoid Tourist Restaurants in High-Traffic Areas

Prices at beachfront restaurants or places near major tourist attractions can be inflated by 100-300% compared to local spots just a few blocks away.

Instead, look for restaurants where locals eat—they tend to offer better food at lower prices.

Buy in Bulk for Extra Savings

Purchasing staples like rice, beans, tortillas, and meats in bulk at local markets or wholesale stores (like Costco or Sam’s Club) can lead to even greater savings.

Eat at Family-Run Restaurants (Fondas)

Fondas serve affordable home-cooked meals, often including a soup, entrée, rice, and drink for just $3-$5 USD.

These small restaurants cater mostly to locals, so you’re getting authentic, high-quality food at local prices.

Comparison Chart: Average cost of Restaurant Meals 2025

Final Thoughts: Food Costs in Mexico vs. the U.S.

When it comes to food, Mexico offers a perfect balance of affordability, quality, and variety. Whether you’re preparing home-cooked meals with fresh market ingredients or enjoying authentic Mexican dishes at a restaurant, you’ll be able to eat well for a fraction of what you’d spend in the U.S.

For many expats, the low cost of groceries and dining out is one of the biggest reasons why their overall expenses drop significantly after moving to Mexico. With careful shopping, smart dining choices, and an openness to exploring local markets and cuisine, you can live well on a much lower food budget than you ever could in the U.S.

Thinking about making the move? Explore our expat resources, community forums, and cost of living guides to help you transition smoothly!

4. Healthcare in Mexico vs. the USA: A Cost-Effective, High-Quality Alternative

One of the biggest advantages of living in Mexico as an expat is affordable, high-quality healthcare. Many Americans and Canadians relocate to Mexico—or travel there specifically—for medical tourism, thanks to its state-of-the-art hospitals, highly trained doctors, and significantly lower costs compared to the U.S.

How Does Healthcare in Mexico Compare to the U.S.?

Unlike in the U.S., where medical costs can be overwhelmingly high, Mexico offers several healthcare options at a fraction of the price. Expats can choose from:

Private Healthcare – Mexico boasts a world-class private healthcare system, with modern hospitals, well-trained doctors (many of whom have studied in the U.S. or Europe), and short wait times. While not free, private healthcare is affordable, with many procedures costing 50-80% less than in the U.S.

Public IMSS (Mexican Social Security Institute) – Expats who obtain residency can enroll in IMSS, Mexico’s government-subsidized healthcare program. While not as fast as private care, IMSS provides affordable coverage for routine check-ups, hospital stays, and medications.

Out-of-Pocket Payments – Unlike the U.S., where even a simple doctor’s visit can be prohibitively expensive, in Mexico, many expats pay out-of-pocket for routine medical care. A doctor’s consultation typically costs between $25-$50 USD, and many prescription medications are available over-the-counter at significantly lower prices.

Cost Comparison: Medical Expenses in Mexico vs. the U.S. (2025)

With prices this low, many expats find that paying out-of-pocket is often cheaper than maintaining private insurance in the U.S. However, for long-term peace of mind, having the right expat health insurance is essential.

Stay Protected with International Health Insurance

While healthcare in Mexico is affordable, having comprehensive health insurance ensures you’re fully covered in case of emergencies, hospitalizations, or unexpected medical needs. Whether you're a digital nomad, retiree, or long-term expat, a global health plan allows you to access care both in Mexico and worldwide.

🔹 Genki Insurance offers a range of affordable, flexible health insurance plans tailored for expats. Their coverage includes:

✔ Emergency medical care

✔ Hospitalization

✔ Doctor’s visits

✔ Prescription medications

✔ Global coverage for those who travel frequently

💡Pro Tip:

Check them out to explore their expat insurance packages: Genki Expat Insurance

For those seeking a lower cost of living, high-quality healthcare, and a relaxed lifestyle, Mexico is one of the best places to relocate. Expats can expect to reduce their expenses by 50-70% while still enjoying:

Final Thoughts: Is Moving to Mexico Worth It?

For many expats, the decision to move to Mexico is life-changing in the best way possible. With significantly lower living costs, affordable healthcare, a warm climate, and a rich cultural experience, Mexico offers a high quality of life without the financial strain of living in the U.S.

How Much Can You Really Save?

By moving to Mexico, expats can expect to cut their living expenses by 50-70%, depending on their lifestyle and location. Here’s a quick recap of the biggest savings:

Housing: Rent is 50-80% cheaper than in major U.S. cities.

Food & Dining: Groceries and restaurant meals cost 40-70% less than in the U.S.

Transportation: Public transit is incredibly cheap, and gas prices are lower than in most U.S. states.

Healthcare: Private healthcare is world-class and costs a fraction of U.S. prices. Many expats choose Mexico for medical tourism due to its affordable surgeries, dental work, and prescription medications.

If you’re earning in U.S. dollars, whether from a remote job, investments, pension, or Social Security, your money will stretch far further in Mexico, allowing you to live comfortably while enjoying a better work-life balance.

Challenges Expats May Face (And How to Overcome Them)

While life in Mexico has many perks, it’s essential to be aware of potential challenges:

1. Language Barrier:

Spanish is the primary language, and while many locals in tourist areas speak English, learning basic Spanish will make daily life easier and more enjoyable. Solution: Take Spanish classes or use language apps like Duolingo or Rosetta Stone.

2. Cultural Differences:

Things move at a slower, more relaxed pace in Mexico, which can be frustrating for those used to fast-paced efficiency. Solution: Embrace the “mañana” mindset—things will get done, just not always on a rigid timeline.

3. Banking and Currency Exchange:

Setting up a Mexican bank account or dealing with currency exchange can take some adjustment. Solution: Use international banking services like Wise or Revolut to avoid high fees.

4. Healthcare and Insurance:

While healthcare is affordable, having the right insurance ensures peace of mind in case of emergencies.

Stay Protected: Health Insurance for Expats

Living abroad comes with incredible experiences, but having the right insurance is essential for a worry-free journey. Whether you're a digital nomad, retiree, or long-term expat, having access to comprehensive health and travel insurance ensures you're covered no matter where life takes you.

Final Takeaway: Should You Move to Mexico?

If you’re looking for a more affordable, relaxed, and enjoyable lifestyle, Mexico is an excellent choice. Whether you’re retiring, working remotely, or simply looking for a fresh start, you’ll find that Mexico offers a lower cost of living, a welcoming expat community, and a quality of life that’s hard to match elsewhere.

Ready to start your journey? Explore our expat resources, real estate listings, and cost of living guides to plan your move today!