Market Overview: Texas Housing Mid-Range
Texas ranks as a mid-range housing market, with a median home price of $303,321. The state's effective property tax rate of 1.80% is higher than the national average of 1.00%, and annual homeowners insurance averaging $3,973 falls above the US median of $2,201.
These three factors — price level, tax burden, and insurance costs — combine to shape the true monthly cost of homeownership in Texas. Below we break down a realistic purchase scenario using state-specific data.
🏡 Purchase Example: Buying a $303,321 Home in Texas
Using the state's median home price of $303,321, a 20% down payment, and a 6.5% 30-year fixed rate, here is the complete picture of what it costs to buy in Texas:
| Cost Component | Amount |
|---|---|
| Home Price | $303,321 |
| Down Payment (20%) | $60,664 |
| Loan Amount | $242,657 |
| Estimated Closing Costs (3.5%) | $10,616 |
| Total Cash Needed at Closing | $71,280 |
Monthly Payment (20% Down)
| Item | Monthly |
|---|---|
| Principal & Interest | $1,534 |
| Property Taxes (1.80%) | $455 |
| Homeowners Insurance | $331 |
| PMI (not needed at 20% down) | $0 |
| Total Monthly Payment | $2,320 |
Annual income needed (28% DTI): $100,000/yr
PMI Scenario: What If You Put Only 10% Down?
With a 10% down payment ($30,332), you'd have a loan of $272,989 and would need to pay Private Mortgage Insurance (PMI) at roughly 0.7% of the loan annually:
| Item | 10% Down | 20% Down (savings) |
|---|---|---|
| Principal & Interest | $1,725 | $1,534 |
| Monthly PMI | $159 | $0 |
| Total PITI+PMI | $2,671 | $2,320 |
The lower down payment costs you an extra $351/month (P&I + PMI). You would need $115,000/yr to qualify under the 28% DTI rule. PMI can typically be canceled once you reach 20% equity.
First-year interest: In year one, $15,693 of your payments go to interest alone. Over the full 30-year term, you'll pay $309,495 in total interest.
💰 State-Specific Cost Notes for Texas
Property taxes in Texas are among the highest in the nation at 1.80%. On a $303,321 home, that's $5,460/year — significantly above the national norm. Buyers should factor this into their budget, as it adds roughly $455/month to the payment.Homeowners insurance in Texas is notably expensive — $3,973/year. This is likely due to exposure to severe weather patterns. It adds $331/month to your housing costs.
Closing costs in a mid-range market like Texas typically run 2%–4% of the purchase price — roughly $10,616 on a $303,321 home. This includes loan origination, appraisal, title insurance, escrow fees, and prepaid taxes/insurance.
Monthly Payment on a $303,321 Home in Texas
With a standard 20% down payment ($242,657 loan) and a 6.5% interest rate on a 30-year fixed-rate mortgage, your estimated total monthly payment comes to $2,320.
Monthly Payment Breakdown (PITI)
| Component | Monthly Cost | Annual Cost |
|---|---|---|
| Principal & Interest | $1,534 | $18,408 |
| Property Taxes (1.80% est.) | $455 | $5,460 |
| Home Insurance | $331 | $3,972 |
| Total Monthly Payment | $2,320 | $27,840 |
Income Required in Texas
Using the standard 28% front-end DTI rule, you'd need a gross annual income of approximately $100,000 to comfortably afford the median-priced home in Texas with 20% down at 6.5%.
How Interest Shapes Your Payments
In your first year, approximately $15,693 goes toward interest alone. Over the full 30-year term, you'll pay a total of $309,495 in interest.
Amortization Schedule — First 10 Years
| Year | Principal Paid | Interest Paid | Balance Remaining |
|---|---|---|---|
| Year 1 | $2,712 | $15,693 | $239,945 |
| Year 2 | $2,894 | $15,511 | $237,051 |
| Year 3 | $3,088 | $15,317 | $233,963 |
| Year 4 | $3,294 | $15,111 | $230,669 |
| Year 5 | $3,515 | $14,890 | $227,154 |
| Year 6 | $3,751 | $14,655 | $223,403 |
| Year 7 | $4,002 | $14,403 | $219,401 |
| Year 8 | $4,270 | $14,135 | $215,132 |
| Year 9 | $4,556 | $13,849 | $210,576 |
| Year 10 | $4,861 | $13,544 | $205,715 |
* Full 30-year amortization available in our interactive calculator.
❓ Frequently Asked Questions — Buying a Home in Texas
How much income do I need to buy a house in Texas?
With the median home price in Texas at $303,321 and a 20% down payment, you need roughly $100,000/year based on the 28% front-end DTI rule (total monthly housing costs of $2,320). If you put down 10%, the income requirement rises to about $115,000/year due to the higher loan amount and PMI.
What's the minimum down payment in Texas?
While 20% down ($60,664) avoids PMI, many Texas buyers opt for lower down payments. FHA loans require as little as 3.5% ($10,616), and conventional loans can go as low as 3%–5% ($9,100–$15,166). However, a 10% down payment ($30,332) would cost you $2,671/month — about $351 more than 20% down — due to PMI and a larger principal.
What are property taxes like in Texas?
Texas's effective property tax rate is 1.80%, which is well above the national average of 1.00. On a $303,321 home, you'd pay approximately $5,460/year in property taxes ($455/month). This is a significant ongoing cost that buyers should weigh carefully against their monthly budget.
How much is homeowners insurance in Texas?
The average annual premium in Texas is $3,973, which is well above the US median of $2,201. This elevated cost is often tied to weather-related risks. Be sure to shop around and compare quotes from multiple insurers. This adds $331/month to your payment.
What are the total closing costs for a home in Texas?
On a $303,321 home in Texas, expect to pay about $10,616 in closing costs. Combined with a 20% down payment ($60,664), you'd need approximately $71,280 in cash at closing. First-time buyers in Texas may qualify for down payment assistance programs or reduced closing costs through local housing authorities — check the Texas Department of Housing and Community Affairs for available grants and low-interest loan programs.
🧮 Try the Interactive Calculator
Adjust the down payment, interest rate, or loan term — see how your payment changes in real time.
Open Full Calculator →📊 All Mortgage Calculators
Choose the tool that matches your situation — or use them all to build a complete picture.
📖 Recommended Reading
Disclaimer: This is an estimate for informational purposes only. Actual mortgage payments depend on your credit score, exact interest rate, property taxes, insurance premiums, PMI, and other factors. Sources: Zillow Q1 2025 (median home prices), ATTOM 2025 (property tax rates), Quadrant Information Services Feb 2025 (insurance premiums). Consult a qualified mortgage professional for personalized advice. See our full Disclaimer.