Do I need PMI in Texas?

Private Mortgage Insurance (PMI) is required if your down payment is less than 20%. PMI typically costs 0.5%-1% of the loan amount annually. On a $400K loan, that's $2,000-$4,000 per year ($167-$333/month). PMI automatically cancels when you reach 20% equity, or you can request removal at 20% and automatic removal at 22%.

Texas Mortgage Calculator - Accurate Property Tax & Insurance Estimates

Q: What is the average property tax rate in Texas?

Texas has some of the highest property taxes in the nation, averaging around 1.8% statewide. However, rates vary significantly by county. Collin County averages 2.0%, Dallas County 2.2%, Harris County (Houston) 2.1%, and Travis County (Austin) 1.8%. Some areas like Fort Bend County can exceed 2.4%. Our calculator uses accurate rates for each Texas county.

Q: How does the Texas homestead exemption work?

Texas offers a homestead exemption that reduces your property's taxable value. All Texas homeowners get a $100,000 exemption from school district taxes. Many counties and cities offer additional exemptions of $5,000-$20,000. Seniors (65+) and disabled homeowners qualify for extra exemptions and a school tax freeze. This can save homeowners $1,500-$3,000+ per year.

Q: Why is homeowners insurance so expensive in Texas?

Texas has the highest homeowners insurance rates in the nation, averaging $3,500-$4,500 per year (vs. $1,900 national average). This is due to severe weather risks (hail, hurricanes, tornadoes), high replacement costs, and litigation rates. Coastal areas and North Texas (hail alley) pay even more. Our calculator uses realistic Texas insurance estimates.

Q: What's included in a Texas mortgage payment?

Your monthly mortgage payment includes Principal, Interest, Property Taxes, Insurance, and possibly PMI (PITI+PMI). In Texas, property taxes and insurance are significantly higher than other states. On a $400K home, you might pay $800/month in taxes + $350/month in insurance alone—compared to $400 + $150 in lower-cost states.

Q: How much house can I afford in Texas?

The standard guideline is spending no more than 28% of gross monthly income on housing. However, in Texas you must account for high property taxes (2%+) and insurance costs. A $100K household income typically supports a $350K-$400K home in Texas, compared to $450K-$500K in lower-tax states. Use our calculator to see your true monthly costs.

Home Details

Home Price

Down Payment

20% down

Interest Rate

Loan Term

Texas Location

County

Homestead Exemption

Primary residence (standard $100K school exemption) Senior (65+) or Disabled (additional $10K + tax freeze)

Estimated savings: $0/year

Insurance & PMI

Annual Homeowners Insurance

TX avg: $3,500-$4,500/year

PMI Rate (if <20% down)

No PMI required

Monthly HOA Fees

Monthly Payment Breakdown

Total Monthly Payment $0

Principal & Interest $0

Property Taxes $0

Homeowners Insurance $0

PMI $0

HOA Fees $0

Loan Amount $0

Total Interest $0

Total Cost $0

                        Annual Property Tax
                        $0
                    

Payment Breakdown

Year	Principal	Interest	Balance

Texas vs. National Average

Property Tax Rate 2.0% 1.1%

Annual Insurance $4,200 $1,900

State Income Tax 0% 4.6%

Extra Monthly Cost +$0 baseline

Frequently Asked Questions

What is the average property tax rate in Texas?

Texas has some of the highest property taxes in the nation, averaging around 1.8% statewide. However, rates vary significantly by county:

Collin County: 2.00%
Dallas County: 2.22%
Tarrant County: 2.26%
Harris County (Houston): 2.09%
Travis County (Austin): 1.81%
Fort Bend County: 2.43%

On a $400,000 home, that's $7,000-$9,700 per year in property taxes alone.

How does the Texas homestead exemption work?

Texas offers generous homestead exemptions that reduce your property's taxable value:

School Tax Exemption: $100,000 off taxable value (all homeowners)
County/City Exemptions: Additional $5,000-$20,000 (varies by location)
Senior (65+) Exemption: Extra $10,000 + school tax freeze
Disabled Exemption: Same benefits as senior exemption

On a $400K home with a $100K exemption at 2% tax rate, you save $2,000/year in school taxes alone.

Why is homeowners insurance so expensive in Texas?

Texas has the highest homeowners insurance rates in the nation, averaging $3,500-$4,500/year (vs. $1,900 national average). Reasons include:

Severe weather: Hail, hurricanes, tornadoes, flooding
North Texas "Hail Alley": DFW area has frequent damaging hail storms
Coastal risks: Hurricane exposure in Houston/Galveston areas
High replacement costs: Labor and materials are expensive
Litigation rates: Texas has high rates of insurance lawsuits

What's included in a Texas mortgage payment?

Your monthly payment (often called PITI) includes:

Principal - Paying down your loan balance
Interest - Cost of borrowing the money
Taxes - Property taxes (escrowed monthly)
Insurance - Homeowners insurance (escrowed monthly)
PMI - Private Mortgage Insurance (if <20% down)
HOA - Homeowners Association fees (if applicable)

In Texas, property taxes and insurance can add $1,000-$1,500/month to your payment on a $400K home.

How much house can I afford in Texas?

The standard rule is spending no more than 28% of gross monthly income on housing. But in Texas, you must account for high taxes and insurance:

$75K income: ~$280K-$320K home
$100K income: ~$350K-$400K home
$150K income: ~$500K-$575K home

These ranges are lower than national calculators suggest because of Texas's higher carrying costs. A $400K home in Texas has similar monthly costs to a $475K home in a low-tax state.

When can I remove PMI?

Private Mortgage Insurance (PMI) is required if your down payment is less than 20%. Here's when it goes away:

Request removal at 20%: Once you reach 20% equity, you can request PMI cancellation
Automatic removal at 22%: Lenders must automatically cancel PMI at 22% equity
Midpoint removal: PMI must end at the loan's midpoint regardless of equity

On a $400K loan, PMI typically costs $250-$335/month. That's $3,000-$4,000/year you can eliminate once you build equity.