Today’s Texas Mortgage Rate

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ByChristopher Boston
Edited byRae Osborn
ByChristopher Boston
Edited byRae Osborn

Updated: September 24, 2023

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Texas’s homeowner rate is a tad below the national average. If you’re thinking about becoming a Texan homeowner, you'll likely need a mortgage — a loan specially designed to help you buy real estate. Remember, not all mortgages are created equal. Some types may be a better fit for your situation than others. Regardless of your mortgage type, though, one factor you can’t disregard is the current mortgage rates in Texas. A competitive figure can make your homeownership journey more affordable. So, if you're dreaming of a home in the Lone Star State, start by seeking out the best rates to enhance your mortgage experience.

Current Mortgage Rates in Texas

FRED Economic Data from 2022 reports a national homeownership rate of 65.9%. In contrast, Texas sits a bit lower at 63.6%. Although fewer Texans own their homes, those aspiring to purchase can significantly benefit from a mortgage. After all, it's not just about getting a mortgage — it's about securing the best rates.

So, how do mortgage rates in Texas stack up? The average rate for a 30-year fixed-rate mortgage sits at 7.08% in Texas, nearly matching the U.S. average of 7.05%. The 15-year fixed-rate average is 6.33%, almost identical to the nation's 6.34%. The 5-year adjustable rate mortgage in Texas is slightly higher, averaging 7.49%, compared to the U.S. at 7.34%.

Rates can shift due to economic conditions, housing market trends and Federal Reserve decisions. Therefore, staying updated on mortgage rates in Texas is crucial. The Lone Star State also offers various mortgage types, each offering a unique rate. Exploring all possible options is a solid strategy to help you find the best deal.


Finding the Best Mortgage Rates in Texas

Mortgage rates directly impact your financial health — present and future. Lower rates can lead to smaller monthly payments and significantly less money paid over the life of the loan. Let's say you snag a rate that's just 0.5% lower — that could translate to savings worth thousands of dollars in the long run. Fortunately, there are several techniques you can apply to find the best mortgage rates in Texas.

  • Consider Seasonal Trends: Believe it or not, mortgage rates often fluctuate depending on the time of year. Typically, they’re lower during the winter months, when there’s less demand in the housing market. Planning your mortgage application for this season could lead to savings.

  • Negotiate Rates: Many people don’t realize that it’s possible to negotiate your mortgage rate with a lender. Make it a point to discuss your options and present reasons why you should get a lower rate, such as having a larger down payment or choosing a shorter loan term. You can also gather quotes from multiple sources and use them as leverage.

  • Maintain Strong Financial Reserves: Lenders often view borrowers with substantial financial reserves as lower risk, which can lead to more favorable rates. Having enough to cover at least six months of mortgage payments might give you the edge when negotiating for a lower rate.

  • Opt for a Shorter Loan Term: While 15-year fixed-rate mortgages in Texas have an average rate of 6.33%, 30-year fixed rates hover around 7.08%. The difference might seem small, but it's a long-term game. Opting for a 15-year term could save you significant amounts over the life of the loan because of the lower rate.

  • Use Points: Buying mortgage points upfront can lower your interest rate over the life of the loan. One point usually costs 1% of your loan amount and could lower your interest rate by up to 0.25%. It’s a long-term saving strategy, so ensure it aligns with your financial goals.

Finding a competitive mortgage rate doesn't happen by chance — it requires strategy. Use these tips to your advantage, and you could save big. Keep an eye on mortgage interest rates in Texas, and remember, every fraction of a percentage point counts!

Mortgage Types in Texas

Every home has a price tag — even the one in your dreams. On average, a house in the U.S. goes for about $349,770, but in the Lone Star State? The average home value is more pocket-friendly, averaging $302,281.

Although Texas homes generally cost less than the national average, a mortgage can bridge the gap between your savings and that dream property. Understanding the average home value in Texas also allows you to negotiate better or even spot a great deal!

Here are some mortgage options Texans can consider:

  • Conventional Mortgage: It’s the most common type of loan and isn't insured by the federal government. These home loans are best suited for those with a good credit score and can put in a down payment of at least 3%. While they might require a steeper upfront payment, they often come with more flexible terms and conditions.

  • FHA Loan: These are ideal for first-time buyers or those who might not have a hefty down payment saved up. These are backed by the Federal Housing Administration, ensuring lenders they'll be repaid even if the borrower defaults. That means you can secure one with a smaller down payment, sometimes as low as 3.5%. However, this comes at the cost of mandatory mortgage insurance, which can add to monthly expenses.

  • VA Loan: These mortgages are exclusively designed for veterans, active-duty military and certain military spouses. One of the biggest perks it offers is that it doesn’t require a down payment. Neither do you need private mortgage insurance (PMI), potentially saving borrowers a significant sum over the loan's life.

  • USDA Loan: This loan, supported by the U.S. Department of Agriculture, is a solid fit for those looking for homes in rural and suburban areas who meet certain income requirements. It offers 100% financing, meaning no down payment is required. Plus, it often comes with lower mortgage insurance premiums.

  • Jumbo Loan: When the property's price exceeds the conforming loan limits set by federal regulators, a jumbo loan comes into play. They usually require a more robust credit profile and a down payment of at least 20% since they’re a bigger risk to lenders. That said, they allow borrowers to access significant capital, making them ideal for luxury homes or high-cost areas.

  • Fixed-Rate Mortgage: This mortgage is all about predictability. Your interest rate remains the same throughout the entirety of the loan. It's perfect for those who crave stability in their financial planning, ensuring monthly mortgage payments won't fluctuate.

  • Adjustable-Rate Mortgage (ARM): These start with a fixed interest rate for a specific period (like five years), after which the rate can change based on market conditions. ARMs can offer lower initial rates, making them appealing. However, there's always the risk that rates might rise, increasing monthly payments down the line.

As you venture into the housing market, remember while Texas offers a buffet of choices, it's vital to align with today's mortgage rates in Texas and your financial picture. Dive deep, weigh the pros and cons and land the deal that brings you closer to your homeownership goals.

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Do you want to find the best loan terms for your profile? Head over to MoneyGeek’s mortgage calculator. It lets you plug in numbers like your down payment, loan term and interest rate. Within seconds, you'll see your potential monthly payments and total loan cost. It's like a quick snapshot of your future finances! So go ahead and play around with the calculator. It’s a simple yet effective way to get one step closer to owning your Texas home.

How to Get a Mortgage in Texas

Understanding the process of getting a mortgage in Texas can give you a head start in the race to your dream home. It's not just about knowing the steps — it's about arming yourself with enough information to get the best deal possible. Let's break down this process into bite-sized pieces.

Check Your Credit Score

Your credit score is crucial because it determines the interest rates lenders will offer you. Obtain a free credit report, scrutinize it for any errors and dispute them if necessary. If your score is lower than you'd like, consider delaying your mortgage application to give yourself time to improve it.

Budget Wisely

Figure out how much you can realistically afford. Use a mortgage calculator to see how various loan amounts and interest rates will impact your monthly payment. It can help you avoid over-committing financially.

Save for a Down Payment

A substantial down payment reduces your monthly payments and could also help you secure a lower interest rate. Aim for at least 20% to avoid paying private mortgage insurance (PMI), although some loans do allow for smaller down payments.

Shop Around for Lenders

Don't limit yourself to your personal bank or the first lender you find online. Check out multiple providers — banks, credit unions and online lenders — and compare their rates and fees. It can save you thousands of dollars over the life of the loan.

Get Pre-Approved

A pre-approval letter from a lender states how much they're willing to lend you based on your financials. This letter shows sellers that you're a serious, qualified buyer and can give you an edge in competitive markets.

Pick the Right Mortgage Type

Fixed-rate mortgages offer predictability, while adjustable-rate mortgages might save you money upfront but come with risks. Texas also offers various loan types, whether conventional or government-backed. Weigh the pros and cons before deciding.

Submit Your Application

This formalizes your intent to borrow. You'll need to provide documents like W-2s, pay stubs and bank statements. Being organized and prepared speeds up this step.

Close the Loan

After your lender approves your mortgage application, you'll need to pay closing costs and settle your down payment at the final meeting. The loan funds will be transferred to the seller, and you'll receive the keys to your new home.

Knowing what to expect at each step can make a world of difference. Keep tabs on current mortgage rates in Texas and shop around to ensure you’re making the most financially sound decision. By doing your homework, you’re not just getting a mortgage — you're laying the foundation for your financial future.

Mortgage Programs in Texas

Owning a home might seem simple, but there are hidden costs like property taxes and repairs that can throw you a curveball. The good news is there are mortgage programs that can make homeownership in Texas more budget-friendly, giving you financial breathing room for those extra costs. One great resource is the Texas State Affordable Housing Corporation. They offer programs that provide lower mortgage rates in Texas and other financial perks. That way, you can focus more on enjoying your home and less on how to pay for it.

Homes for Texas Heroes Program

The Homes for Texas Heroes Program is not just another mortgage plan — it's tailored to help the Lone Star State's everyday heroes achieve their homeownership dreams. It focuses on teachers, police officers, firefighters, EMS workers and veterans. If you qualify, you'll get a home loan and down payment assistance to make buying a home easier. You can even choose to get the down payment help as a grant (which you won't have to pay back) or as a deferred loan.

You might also qualify for a Mortgage Credit Certificate if you're buying your first home, which can save you money on your taxes. Plus, if you're a Texas Hero and you use both benefits, the certificate comes at no cost. To be eligible, you'll need a credit score of at least 620 and meet certain income criteria.

Home Sweet Texas Home Loan Program

The Home Sweet Texas Home Loan Program goes the extra mile to make homeownership a reality for low and moderate-income families in the Loan Star State. It offers more than just mortgage loans. They'll also help you with your down payment, and you have two awesome choices: you can receive it as a grant, meaning you don't have to pay it back, or as a deferred forgivable loan that you'll only repay if you sell or refinance within three years.

You can determine your eligibility by taking a brief online quiz. You'll need a minimum credit score of 620 and must meet certain income criteria. If you're a first-time homebuyer, you can apply for a Mortgage Credit Certificate to lower your tax bill. It can be a real budget-saver as you settle into your new home.

Mortgage Credit Certificates (MCC)

The Mortgage Credit Certificate (MCC) could be a game-changer because it gives an annual tax credit equal to 20% of your paid mortgage interest. That means you not only get some of your money back, but it also effectively reduces your mortgage interest rate, making your monthly payments smaller.

To qualify, you'll have to meet specific income guidelines, and your chosen home must fall within a certain price range. You can also pair this MCC with TSAHC’s down payment assistance programs, like Homes for Texas Heroes. If you're eligible for both, you get your MCC for free, offering you maximum savings on your home purchase.

Frequently Asked Questions

You’re in the right place if you have questions about mortgage rates in Texas. We answered some common queries to give you more insights into what you can expect when looking for a home loan in the Lone Star State.

How do current mortgage rates in Texas compare to the U.S. average?
What factors most commonly influence mortgage rates in Texas?
Is it possible for homebuyers to lock in a mortgage rate in Texas?
How can the size of a down payment impact a borrower's mortgage rate in Texas?
Are there specific mortgage programs available for first-time homebuyers in Texas?
How beneficial can refinancing be for homeowners looking to improve their mortgage rates in Texas?

About Christopher Boston

Christopher Boston headshot

Christopher Boston is a Senior Manager of Content Strategy and SEO at MoneyGeek. For over half a decade, they have crafted hundreds of articles spanning the higher education, mortgage and personal loan industries. Christopher is passionate about using their skills and experience to create quality content that helps people save and spend their earnings efficiently.