What Is the Average Mortgage Payment in Texas?

The Texas housing market continues to attract attention, making understanding mortgage payments important for current and prospective homeowners. Homeownership involves more than just the purchase price, as ongoing monthly payments form a significant financial commitment. These payments are influenced by various factors, reflecting both broader economic conditions and individual financial situations. Examining the components and determinants of mortgage payments provides insights into the financial landscape of owning a home in Texas.

The Current Average Mortgage Payment in Texas

The average monthly mortgage payment in Texas was approximately $1,965.01 in 2023. This figure provides a general indication of housing costs across the state. For comparison, the national average monthly mortgage payment was $2,209 in April 2024.

While a statewide average offers a snapshot, actual mortgage payments vary considerably based on specific location and property type. Metropolitan areas within Texas may see higher average payments due to elevated home prices.

Understanding Mortgage Payment Components

A typical mortgage payment consists of four primary components, often referred to by the acronym PITI: Principal, Interest, Property Taxes, and Homeowner’s Insurance. These figures typically encompass the principal and interest portions of the loan.

The principal portion of the payment reduces the outstanding loan balance, while the interest is the cost of borrowing money. Over the life of a fixed-rate loan, the proportion of principal and interest paid each month shifts, with interest making up a larger share in the early years. As the loan matures, more of each payment goes toward reducing the principal.

Property taxes represent a significant component of homeownership costs in Texas. Texas does not levy a state-level individual income tax, so local governments rely heavily on property taxes to fund public services like schools, police, and fire departments. The average effective property tax rate in Texas ranges from 1.47% to 1.68% of a home’s assessed value, which is higher than the national average. For a homeowner, this can translate to an annual property tax bill of around $3,872.

Homeowner’s insurance is another necessary component, protecting the property against various perils. Texas is susceptible to natural disasters, including hurricanes, hail, tornadoes, and floods. These factors can lead to higher insurance premiums compared to other regions. Standard homeowner’s insurance policies often do not cover flood damage or, in some coastal areas, wind and hail damage, requiring separate, specialized policies.

Key Determinants of Mortgage Payment Amounts

Several factors directly influence the size of a homeowner’s monthly mortgage payment, shaping the overall PITI amount. The initial home purchase price is a primary determinant, as a higher price directly translates to a larger loan amount, which increases both the principal and interest portions of the payment. Home prices across Texas have seen fluctuations, with the statewide median home price stabilizing around $345,000 in June 2024.

Current interest rates also play a substantial role in calculating the monthly payment. Mortgage interest rates, which fluctuate based on economic conditions and Federal Reserve actions, significantly impact the interest portion of a loan. Average 30-year fixed mortgage rates were around 6.75% in June 2025. A difference of even a fraction of a percentage point in the interest rate can result in considerable savings or additional costs over the loan’s term.

The size of the down payment made on a home directly affects the loan amount and, consequently, the monthly payment. A larger down payment reduces the principal borrowed, leading to lower monthly principal and interest payments. A down payment of 20% or more allows borrowers to avoid private mortgage insurance (PMI), an additional monthly cost that protects the lender in case of default.

The loan term, commonly 15-year or 30-year, also influences the payment structure. A shorter loan term, such as a 15-year mortgage, results in higher monthly payments because the principal is repaid over a shorter period. However, a shorter term also means less interest paid over the life of the loan. Conversely, a 30-year mortgage offers lower monthly payments, providing greater affordability, but accrues more interest over the longer repayment period.

A borrower’s credit score is another factor that influences the interest rate offered by lenders. A higher credit score indicates a lower risk to lenders, allowing borrowers to qualify for more favorable interest rates. This improved rate directly translates to a lower monthly interest payment, reducing the overall mortgage expense.

Regional Differences in Texas Mortgage Payments

Mortgage payments vary significantly across different regions and metropolitan areas within Texas, reflecting diverse local housing markets. These disparities are primarily driven by differences in median home prices, local property tax rates, and insurance costs.

Median home prices in major Texas cities as of late 2024 or early 2025 show considerable variation. Austin consistently ranks among the more expensive markets, with median home prices around $426,941 in Q1 2025. Dallas also reflects higher values, with median prices reaching approximately $404,995 in October 2024. Houston’s median prices were about $337,852 in October 2024, while San Antonio’s median home price was around $299,000 in Q1 2025, making it one of the more affordable major cities. El Paso had a median home price of approximately $223,587 in December 2024.

Local property tax rates also contribute to regional differences in mortgage payments. Specific city or county rates can fluctuate. For instance, San Antonio’s property tax rate hovers around 2.03%, while some smaller cities like Aubrey can have rates around 1.4%. These rates are set by local taxing entities to fund community services, and variations reflect local budgetary needs and property values.

Insurance costs also play a part in regional payment differences, particularly due to Texas’s varied geography and exposure to natural hazards. Coastal areas, prone to hurricanes and tropical storms, often have higher homeowner’s insurance premiums and may require specialized windstorm insurance. Inland regions, while less susceptible to hurricanes, can still face high costs due to hail and tornado risks. These localized risks are factored into insurance pricing, leading to different overall monthly mortgage payments for homeowners across the state.