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Mortgage Rates in Texas — Plus Stats, First-Time Homebuyer Programs and Mortgage Refinancing

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The average mortgage interest rate in Texas is 3.40%, just 1% higher than the national average of 3.37%. However, the slight increase in the mortgage rate is more than offset because Texas’ property values are, on average, $40,600 lower than the U.S. average, making the Lone Star State an affordable place to live.

To give you a better sense of the homeownership landscape here, the research team at LendingTree compiled a number of findings outside of mortgage rates in Texas, including mortgage facts about Texas’ biggest cities and towns and key information on first-time homebuyer programs in the state.

Mortgage rates in Texas, plus more stats on the Lone Star State

How Texas mortgages compare to the rest of the U.S.
U.S. Texas Difference Difference % Rank among states
Average borrower credit score 734 731 -3 -0.4% 29
Average mortgage size $284,152 $261,042 -$23,110 -8.1% 19
Average mortgage monthly payment $1,252 $1,157 -$95 -7.6% 20
Average mortgage interest rate 3.37% 3.40% 0.03% 1.0% 21
Average mortgage APR 3.61% 3.65% 0.04% 1.1% 21

Source: LendingTree internal data.
Note: Includes 30-year mortgages closed in 2020. State rankings go from high (1) to low (50) for credit score, mortgage size and monthly payment. State rankings go from low (1) to high (50) for interest rate and APR.

How Texas mortgage-holders compare to the rest of the U.S.
U.S. Texas Difference Difference % Rank among states
Median home value $239,100 $198,500 -$40,600 -17.0% 29
Median household income $93,884 $96,937 $3,053 3.3% 18
Median monthly housing costs $1,595 $1,606 $11 0.7% 18
Median real estate taxes (annual) $2,750 $3,835 $1,085 39.5% 10

Source: American Community Survey (2019 5-Year Estimates), U.S. Census Bureau.
Note: Real estate taxes are for homes with active mortgages. Home values are estimated by surveyed owners. State rankings go from high (1) to low (50).

In Texas, the average mortgage size is $261,042. While that mortgage amount is larger than the ones found in any of the states bordering the Lone Star State — including Louisiana, Arkansas, Oklahoma and New Mexico — it’s still decidedly lower than the national average. In fact, the average mortgage amount in Texas is 8.1%, lower than the national average of $284,152.

Naturally, that lower mortgage amount also translates to a lower monthly payment. Texans put an average of $1,157 toward their monthly housing costs, compared with the national average of $1,252 — translating into an extra $95 in Texans’ pockets each month.

That said, living in Texas doesn’t necessarily translate to automatic saving on all housing-related costs. For example, real estate taxes in Texas are higher than average. While Texans pay a median amount of $3,835 a year in real estate taxes, the typical American homeowner only pays $2,750. That puts Texas at the 10th highest property tax rate in the nation.

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Mortgage facts in Texas’ biggest cities and towns, from Abilene to Wichita Falls

Still, looking at averages on a statewide basis only tells part of the story. To take a closer look, the research team zeroed in on mortgage facts for Texas’ biggest cities and towns. In this case, they looked at places with populations of at least 50,000 residents.

If you’re looking for one of the most affordable areas in the Lone Star State, consider Pharr, where median homeowner costs only amount to $1,090 a month. At just $102,300 in Pharr, median owner-estimated home values are much lower than the statewide median of $198,500. The property taxes in Pharr are much lower, too, at a median cost of $2,706 a year.

On the other hand, if you’re searching for the highest property values, take a look at Flower Mound. In Flower Mound, 85.8% of the population holds an active mortgage and, according to owner estimates, the median home value is $368,300. However, in exchange for the increase in value, you should be prepared to pay more for housing costs, which amount to a median of $2,441 a month.

Top 5 and bottom 5 in Texas

Next, in addition to interest rates, we wanted to highlight a few places based on the percentage of residents with active mortgages and median property tax rates. In particular, we’ve highlighted the top five and bottom five cities and towns based on affordability. Take a look below to find out which locales made the list.

3 first-time homebuyer programs in Texas

If you’re a first-time homebuyer who wants to put down roots in Texas, you may be eligible for some added assistance with your down payment and closing costs. The following programs are specifically geared toward those looking to settle down in the Lone Star State.

Home Sweet Texas

The Home Sweet Texas program offers low- to moderate-income Texans down-payment assistance as a grant or a forgivable second-lien loan. The down-payment assistance can equal up to 5% of your mortgage amount.

Who qualifies?

Eligible homeowners must:

  • Meet certain income and purchase price limits, though expanded limits are available in certain targeted areas
  • Use a participating lender

Homes for Texas Heroes

As the name suggests, the Homes for Texas Heroes program provides down-payment assistance grants or forgivable second-lien loans to those who work to help others. Teachers, police officers, firefighters and emergency medical services (EMS) personnel, corrections officers and veterans are eligible, even after buying their first home.

Who qualifies?

Eligible homeowners must:

  • Meet the specific eligibility criteria required for their profession
  • Meet certain income and purchase price limits, though expanded limits are available in certain targeted areas
  • Use a participating lender

My First Texas Home

Available to first-time homebuyers, the My First Texas Home program offers a 30-year, 0% interest loan that can help cover the upfront costs of buying a home. The loan can be worth up to 5% of your mortgage amount and it can be combined with Texas’ mortgage credit certificate.

Who qualifies?

Eligible homeowners must:

  • Be first-time homebuyers with a minimum credit score of 620
  • Meet income and property value limits
  • Work with a participating lender

How to refinance your mortgage in Texas

If you own your own home, you may be interested in mortgage rates in Texas from a refinancing perspective. In lending, refinancing is the process of taking out a new home loan — usually one with better terms — to pay off your old one. While every homeowner’s refinancing scenario is different, here are a few tips to find your best rate:

  • Shop around: While your current lender is a great place to start, gathering quotes from a few different lenders is the best way to ensure that you get your best rate.
  • Give every lender the same information: While you’re shopping around, be sure to give every lender the same information. It will make it easy to ensure that you can make an apples-to-apples comparison between quotes.
  • Make a decision after gathering at least three quotes: Getting different quotes will allow you to make the best choice for you once you see the range of available rates.

Sources

  • LendingTree proprietary and anonymized 2020 customer data
  • U.S. Census Bureau American Community Survey, 2019 5-year estimates (latest available)
 

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