If you want to buy a home in Texas, you should know that there are fees on top of the loan’s principal and interest payment. You must account for real estate taxes, insurance premiums and homeowners association (HOA) fees, when applicable, in your budget. Nonetheless, monthly mortgage payments in Texas are around $22 cheaper compared to the national average.
At 1.80%, Texas has the 7th most expensive property tax rate in the United States; the average cost per year for property taxes is $3,907. The average cost of homeowners insurance in Texas is $3,390, and HOA dues vary based on your location.
Using MoneyGeek’s Texas mortgage calculator, you can determine how much it costs to buy a house with all fees included. Our calculator allows you to adjust the down payment, loan term, interest rate and input additional fees.
Our guide also includes resources that help you make smarter decisions in your home-buying journey, instructions on how to use the calculator, and tips for decreasing the amount you pay per month for a mortgage in Texas.
Start Here: Plug In Your Mortgage Factors
MoneyGeek’s Texas mortgage calculator presents a general estimate of your monthly mortgage payment using 12 relevant factors. We broke down each of the factors below to help you understand them better.
Texas Mortgage Calculator
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Why and How to Use Our Mortgage Calculator
In Texas, the average cost of a house is $199,900, and the average outstanding mortgage amount is $177,924. With MoneyGeek’s Texas mortgage calculator, you get an estimate of how much you may pay each month after purchasing your home. It is crucial to do this to know how much you can afford and budget accordingly.
Our calculator uses the home price or mortgage amount to calculate the payment, displaying principal and interest, and allows you to change your loan term based on your preferences. You can also add additional fees like property taxes, homeowners insurance and homeowners association (HOA) dues. Here are the factors every potential home-buyer needs to know that our mortgage calculator includes.
Input your home’s selling price or your desired loan amount.
This refers to the upfront payment you make before taking out the loan. You can place either a percentage or an amount in dollars.
You can use MoneyGeek’s daily mortgage rate reports or obtain rates from mortgage lenders to know your loan’s interest rate.
This is the number of years to pay the loan. While 15 and 30 are the most common, you can choose 10 or 20.
Payments per Year:
This refers to the number of payments you make on the loan per year. The most common is monthly or 12 times a year.
In Texas, the average annual property tax is $3,907. You can input this under “Other fees.”
If your property has homeowners association (HOA) dues, you should include it under “Other fees.”
Principal & Interest:
The principal is the amount that pays back the loan, while the interest is the money you’re paying to the lender for providing the loan.
You pay this amount monthly for your property, which includes the principal, interest, taxes, home insurance and HOA fees.
It’s the part of your monthly mortgage payment that reduces your total loan balance.
This is the part of your monthly mortgage payment that pays your interest charges. It does not lower your balance.
Total Cost With Interest:
This refers to the sum of your principal balance repayment and interest paid for the entire loan term.
To lower your monthly mortgage payments in Texas, you can do the following.
- Purchase a less expensive property. Your mortgage payment depends on your loan amount, and purchasing a cheaper home means you can take out a smaller loan, reducing your monthly payment.
- Pick a different location. Texas ranks 28th in the United States for housing affordability, but property tax is high at 1.80%, and may vary in certain areas. Choosing a different location may lower your property tax.
- Find a lower interest rate. You can pay a larger down payment to get a lower interest rate. Or, improving your debt-to-income ratio and credit score before applying for a loan or considering refinancing can get you a better rate.
- Extend your loan term. Choosing a 20-year loan over a 15-year loan, for example, lowers your monthly payment. However, you pay more for interest over the loan term.
Next Steps: What to Do After You Have Estimated Your Mortgage Payments
Buying a house in Texas is a big financial decision. Fortunately, MoneyGeek’s resources can help you with the process.
- Shop & Compare Rates - To obtain the best offers, shop around and compare interest rates from various lenders. Visit our Texas mortgage rate page for more details.
- Not Ready To Buy? - Before proceeding with your loan, evaluate whether buying a house or renting is a better option.
- Learn More - There are many loan programs you may qualify for to get a mortgage more easily. Read about reverse mortgages, VA loans and FHA loans for your home purchase.