What Makes a Texas Mortgage Different?
Texas has no state income tax, which sounds like a straightforward win for anyone buying a home here. The trade-off shows up in property tax instead. Texas leans on it more heavily than most states, so your monthly mortgage payment often carries a bigger property tax slice than a buyer in a state with income tax would see.
This calculator estimates your principal and interest the same way any mortgage calculator would, but the numbers below fill in the Texas-specific pieces, property tax, closing costs, and exemptions, that actually decide what you'll pay each month. USACalculator prefills the fields with a realistic Texas example so you can see the shape of a typical payment before swapping in your own numbers.
Using the Calculator
The fields below start with example numbers close to a typical Texas home purchase. Replace the home price, down payment, term, and rate with your own figures, and the monthly principal and interest payment updates instantly. Once you have that number, add your county's property tax rate on top to get a realistic full monthly cost, and check our Texas Paycheck Calculator to see how it fits your take-home pay.
How the Calculation Works
The monthly principal and interest payment uses the standard amortization formula, based on your loan amount, interest rate, and term in months. What this calculator doesn't automatically add is property tax, homeowners insurance, and any HOA dues, since those vary by county and neighborhood. A full Texas monthly payment typically runs 20% to 35% higher than the principal-and-interest number alone once tax and insurance are folded in.
Texas-Specific Mortgage Information
Property Tax
Property tax is set locally by your county, city, and school district, not the state, so it varies by address. Statewide, effective rates commonly land in the 1.6% to 1.8% range of a home's assessed value annually, among the higher rates in the country. This is the single biggest Texas-specific factor in your total monthly cost.
Homestead Exemption
If the home is your primary residence, Texas allows you to file for a homestead exemption through your county appraisal district. It reduces the taxable value used for school district taxes specifically, lowering your annual bill. It only applies to owner-occupied homes, not investment or rental property.
Closing Costs
Expect closing costs in the 2% to 6% range of your loan amount, in line with national norms. One Texas quirk: title insurance premiums are set by the Texas Department of Insurance, so they don't vary by shopping around the way they might in other states.
No Transfer Tax
Texas charges no real estate transfer tax, which some states apply at closing based on the sale price. It's a small but real saving compared to buying the same home in a state that does.
HOA and Insurance
HOA fees show up often in newer developments around the state's major metros, less so in older or rural areas. Homeowners insurance costs also run above the national average in parts of Texas exposed to hail and wind risk, so it's worth getting a real quote rather than assuming a flat percentage.
Why Texans Use This Calculator
Buyers use it to sanity-check a lender's pre-approval number before shopping seriously. Homeowners refinancing use it to compare their current rate against today's market. Anyone relocating to Texas uses it to translate an out-of-state salary into what home price actually fits their budget once the state's property tax reality is factored in, alongside our Car Loan Calculator if a move means financing a vehicle too.
Common Mistakes to Avoid
- Budgeting only the principal and interest number and forgetting property tax and insurance.
- Skipping the homestead exemption application after closing, which leaves money on the table every year.
- Assuming property tax rates are the same statewide. They're set locally and shift by county and school district.
- Underestimating homeowners insurance in areas with higher storm risk.
Frequently Asked Questions
Does Texas have a real estate transfer tax?
No. Texas charges none, unlike many other states that tax the sale price at closing.
What is the property tax rate in Texas?
It's set locally and varies by county, but the statewide effective rate generally falls between 1.6% and 1.8% of a home's value.
What is the homestead exemption in Texas?
A reduction in taxable value for a primary residence, mainly lowering the school district portion of your property tax bill. You apply through your county appraisal district.
Are closing costs in Texas higher than other states?
Not dramatically. They typically run 2% to 6% of the loan amount, and title insurance rates are set statewide by the Texas Department of Insurance.
Does Texas require mortgage insurance?
Not by state law, but lenders require private mortgage insurance on conventional loans with less than 20% down, the same as anywhere else.
How does no state income tax affect Texas homebuyers?
It leaves more of your paycheck available for housing costs, which can help offset the state's above-average property tax.
Are HOA fees common in Texas?
Yes, particularly in newer suburban developments around the major metro areas. Older and rural properties are less likely to have one.
What are conforming loan limits in Texas?
Most counties follow the standard baseline set annually by the Federal Housing Finance Agency, since few parts of the state qualify as high-cost areas.
How much should I budget for property tax in my Texas mortgage payment?
Lenders typically escrow about one-twelfth of your estimated annual property tax bill into each monthly payment, so a higher local rate raises your total cost directly.
Related Calculators
Check your take-home pay first with the Texas Paycheck Calculator, or plan a vehicle purchase alongside your home with the Car Loan Calculator. Browse more tools at USACalculator.
Sources: Texas Comptroller Property Tax Assistance, Texas Department of Insurance. Figures reviewed for 2026. This calculator provides an estimate for planning purposes and is not financial advice — confirm exact local rates with your county appraisal district.