Texas Mortgage Calculator 2026

Calculate your monthly mortgage payment for a home in Texas (TX). The median home price in Texas is $350,000, with an effective property tax rate of 1.58% (ranked #7 nationally). Use our free calculator to compare FHA, VA, USDA, and conventional loan options with real Texas data.

Texas presents a moderately affordable market with home prices 17% below the national median. The state features higher property taxes that are 60% above the national average, which significantly impacts long-term homeownership costs and monthly mortgage payments. Currently, market conditions favor buyers with more negotiating power and less competition, with homes spending an average of 52 days on market before selling. Over the past year, home values in Texas have declined 0.5%, reflecting broader economic trends in the region. Additionally, Texas stands out for offering 3 different down payment assistance programs through TDHCA, providing multiple pathways to homeownership for qualified buyers. The South continues attracting domestic migration with its lower cost of living, favorable tax environment, and job growth. Population influx supports housing demand but also creates competitive conditions in popular metros. Whether you're relocating for employment opportunities, seeking better affordability than neighboring states, or putting down roots in the South, understanding Texas's unique real estate landscape is essential for making a sound financial decision that will impact your family for years to come.

Texas Housing Market Overview

The Texas housing market in 2025 reflects unique regional dynamics shaped by technology sector growth and energy industry presence. With a median home price of $350,000, the state offers good affordability compared to national benchmarks. Price adjustments of -0.5% present potential opportunities for buyers to secure better value. Balanced inventory provides buyers with reasonable selection without extreme competition, creating a healthy negotiating environment. Texas's population growth—driven by domestic migration and employment opportunities—sustains housing demand and supports property value appreciation over time. Understanding these market fundamentals helps buyers set realistic expectations about pricing, competition, and timeline. Local economic conditions including employment rates, major employer presence, and infrastructure development all influence neighborhood-level price variations throughout Texas.

Texas Property Tax Information

Texas has an effective property tax rate of 1.58%, ranking #7 among all 50 states. The median annual property tax is $4,111 ($343/month). Source: Tax Foundation 2025.

Texas Loan Limits 2026

FHA loan limit in Texas: $524,225 (floor) to $524,225 (ceiling for high-cost areas). Conforming loan limit: $806,500 (baseline) to $806,500 (ceiling).

Estimated Monthly Payment in Texas

For a median-priced home of $350,000 with 20% down ($70,000), at 6.5% interest over 30 years: estimated monthly principal and interest is $1,770, plus $343 in property taxes and approximately $125 in homeowner's insurance, for a total estimated payment of approximately $2,238/month.

Texas Closing Costs

Average closing costs in Texas are $3,713 (0.93% of purchase price), ranked #23 nationally. Texas does not charge a transfer tax. Source: Bankrate/LodeStar 2025.

Texas Housing Market 2026

Home prices in Texas have decreased 0.5% year-over-year. Average days on market: 52. Inventory level: moderate. Currently considered a buyer's market.

Down Payment Assistance Programs in Texas

Texas offers 3 down payment assistance programs through Texas Department of Housing and Community Affairs (TDHCA):

  • My First Texas Home (second mortgage): 0% interest, deferred payment for first-time buyers. - Up to Up to 5% of loan amount
  • My Choice Texas Home (second mortgage): For repeat buyers. 0% interest, deferred payment. - Up to Up to 5% of loan amount
  • Texas Heroes Program (forgivable loan): For teachers, veterans, first responders. Rate discount. - Up to Up to 5% + reduced rate

Contact TDHCA: https://www.tdhca.state.tx.us | Phone: 512-475-3800

Property Tax Analysis for Texas Buyers

Texas has an effective property tax rate of 1.58%, ranking #7 out of 51 jurisdictions (including Washington D.C.). This rate is among the highest in the nation. On the state's median home price of $350,000, you would pay $5,530 annually, or approximately $461 per month in property taxes alone. This is higher than the national average of 0.99%. Over a 10-year period, you would pay approximately $55,300 in property taxes on a median-priced home. It's essential to factor these substantial costs into your monthly budget when calculating true affordability and comparing homes across different price points. Despite higher rates, Texas may offer property tax relief programs including homestead exemptions, senior citizen exemptions, veteran exemptions, and caps on annual assessment increases. Check with your local tax assessor for all available programs. Given higher tax rates, accurate property assessment becomes especially important. Texas homeowners should monitor their assessed values and challenge assessments that exceed fair market value. Understanding property taxes is crucial because lenders include them in your PITI (Principal, Interest, Taxes, Insurance) calculation when determining how much home you can afford. A lower property tax rate in Texas effectively increases your purchasing power compared to higher-tax states, allowing you to qualify for more expensive properties or enjoy lower monthly payments.

First-Time Buyer Tips for Texas

  • Get pre-approved before house hunting. Texas lenders can provide pre-approval letters that strengthen your offers, help you understand your true budget, and show sellers you're a serious buyer. Pre-approval typically takes 1-3 days and involves a credit check and income verification.
  • Complete a HUD-approved homebuyer education course early in your journey. Many TDHCA programs require this 4-8 hour course, and the knowledge about budgeting, the purchasing process, and avoiding predatory lending is valuable regardless. Free and low-cost options are available online at hud.gov.
  • Research TDHCA programs before you need them. Down payment assistance funds are allocated annually and programs may close when exhausted. Contact TDHCA at https://www.tdhca.state.tx.us or 512-475-3800 to learn current availability and requirements.
  • Budget for more than the down payment. You'll need funds for closing costs (averaging $3,713 in Texas), home inspections ($400-600), moving expenses ($1,000-5,000), and immediate repairs or purchases. Plan for 6-12 months of reserves beyond closing costs.
  • Never skip the home inspection—even in competitive markets. While it adds $400 to $600 to your costs, professional inspection can reveal expensive issues like foundation problems, roof damage, or outdated electrical systems before you're legally committed to the purchase. Some issues cost tens of thousands to repair.
  • Understand Texas's property taxes before committing. At 1.58%, your annual tax bill on a median home would be approximately $5,530. This ongoing cost significantly impacts your true monthly payment and long-term affordability.
  • Shop multiple lenders for the best rates and terms. Interest rates and lender fees vary significantly—sometimes by 0.25-0.5% on rate alone. Getting quotes from at least 3 lenders and comparing Loan Estimates can save thousands or tens of thousands over the life of your loan.
  • Consider total housing costs, not just the mortgage payment. Your complete monthly obligation includes property taxes, homeowner's insurance, any HOA fees, and maintenance (budget 1-2% of home value annually for repairs and upkeep). A $300,000 home requires approximately $3,000-6,000 annually for maintenance alone.
  • Build your team carefully. Interview multiple real estate agents to find one who knows your target neighborhoods and communicates in your preferred style. Ensure your lender is responsive and explains options clearly. A good team makes the difference between a stressful and smooth experience.
  • Stay flexible on wants vs. needs. First-time buyers often must compromise—on location, size, condition, or features. Focus on non-negotiables (location, school district, number of bedrooms) and be willing to flex on cosmetic issues or upgrades you can add later.

Tax Advantages of Homeownership in Texas

Homeownership in Texas offers several tax advantages worth understanding and planning for. Texas has no state income tax, which can significantly increase your take-home pay and homebuying power compared to states with income taxes. This savings compounds over your career and can accelerate wealth building. While Texas doesn't currently offer an MCC program, you may still deduct mortgage interest on your federal taxes if you itemize deductions. With the standard deduction at $29,200 for married couples filing jointly (2024), analyze whether itemizing makes sense for your situation. Property taxes paid on your primary residence are generally deductible on federal taxes, subject to the $10,000 SALT (State and Local Taxes) cap. At $5,530 annually on a median Texas home, this deduction provides meaningful value, especially combined with other itemized deductions. First-time buyers may be eligible for penalty-free IRA withdrawals of up to $10,000 for home purchase costs. Some Texas localities offer additional property tax exemptions for homestead properties, seniors, veterans, or disabled homeowners—check with your local assessor. Consult with a tax professional to understand all available deductions and credits based on your specific situation and to plan your purchase timing optimally.

Did You Know About Texas?

  • Texas has no state income tax but higher property taxes (7th highest)
  • No transfer tax on real estate transactions
  • Appraisal caps limit annual property tax increases to 10%
  • Major metros (Dallas, Houston, Austin, San Antonio) have distinct markets

Frequently Asked Questions About Buying a Home in Texas

What is the average property tax rate in Texas?

The effective property tax rate in Texas is 1.58%, with a median annual tax of $4,111. This ranks #7 among all states.

What are the FHA loan limits in Texas for 2026?

The FHA loan floor in Texas is $524,225 and the ceiling is $524,225 for high-cost areas. The conforming loan limit baseline is $806,500.

How much are closing costs in Texas?

Average closing costs in Texas are $3,713, which is approximately 0.93% of the purchase price.

Are there first-time homebuyer programs in Texas?

Yes, Texas offers 3 down payment assistance programs through Texas Department of Housing and Community Affairs, including grants, forgivable loans, and second mortgages.

Is Texas a good place to buy a home in 2026?

With a median home price of $350,000 and moderate inventory, Texas is currently a buyer's market. Home prices have decreased 0.5% over the past year.

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Data last updated: 2025-11. This information is for educational purposes only and should not be considered financial advice.