Texas Mortgage and Refinance Rates

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Texas Mortgage Rates

The mortgage rates in Texas are slightly below the national average, but the state ranks in the top 20 most expensive states across several different metrics and studies. Still, if you’re looking to move to Texas, there are plenty of reasons to make it work.

The Lone Star State offers residents a mix of warm weather, outdoor and water recreation, a slew of major industries and other attractive amenities, though what you have access to will depend on where you are in the state. 

Texas doesn’t offer just outdoor and job perks, though. When compared with the rest of the country, Texas’ mortgage rates come in slightly lower than the national average. The median cost of property in the state is also lower than the national average, which could make buying a house in Texas an affordable option.

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Current Texas Mortgage Rates

Product Rate Rate Last Week
30-Year Fixed Rate3.080%3.140%
30-Year FHA Rate2.770%3.020%
30-Year VA Rate2.820%3.070%
30-Year Fixed Jumbo Rate3.110%3.210%
20-Year Fixed Rate3.170%3.240%
15-Year Fixed Rate2.690%2.780%
5/1 ARM Rate3.160%3.220%
5/1 ARM Jumbo RateN/AN/A
7/1 ARM Rate3.180%3.230%
7/1 ARM Jumbo Rate3.280%3.300%
10/1 ARM Rate3.270%3.310%

Rates data based on Houston, Texas as of 8/4/2020

Rates data gathered from Houston zip code 77001

Getting a mortgage in Texas

When it comes to getting a mortgage in Texas, there are plenty of positives to look at. First, the median home price is almost $40,000 less than the current national average. Not only are the homes somewhat cheaper, but the mortgage rates are slightly lower than the current national average on 30-year fixed-rate loans. Compare national mortgage rates to see how they stack up against Texas’ rates.

Homeownership rates in Texas were on par with the national average as of 2019. According to the World Population’s Cost of Living index, Texas is the 18th least expensive state to live when weighed against the rest of the nation and 20th  least expensive for cost of housing. One thing to note, though, is that the average annual cost of homeowner’s insurance in Texas is the 3rd most expensive, with an average cost of $2,451 per year.

  • Median home price: $161,700
  • Average 30-year fixed rate: 3.55% APR
  • Median monthly ownership cost: $1,549
  • Homeownership rate: 61.9%

*Rates and data as of May 5, 2020. Assuming 3.72% APR national average on a 30-year fixed-rate mortgage.

Texas state mortgage rate trends

Mortgage rates in Texas have gradually fallen over the past two years. Average APRs on 30-year fixed-rate loans were about 4.25% as of April 2018, and by May 2020, those rates had fallen to an average 3.55% APR.

Interest rates on 10-, 15- and 20-year mortgages in Texas closely mirrored the same pattern as the 30-year loans, but started and ended at slightly lower percentage points. The future of mortgage rates in the state will depend on the market and the effects of the global pandemic — which no state is immune from.

Texas state current mortgage rates

Mortgage rates in Texas are currently slightly lower than the national average. The average APRs on 10-, 15-, 20- and 30-year fixed-rate mortgage loans range from 2.80% to 3.60% right now, but keep in mind that these calculations assume a 740 or higher credit score and a 20% down payment. Expect the rates to vary by lender, credit score, and other financial requirements, just as they would in any state.

Refinancing rates across the state have followed the same downward trend as purchase rates over the last two years. A 30-year mortgage refinance rate in Texas currently averages about 3.5% APR. Interest rates for 10- and 15-year refinances are, on average, just slightly higher than 2.80% APR on average.

Most and least expensive places to live in Texas

Least expensive places to live in Texas

  1. Waco, TX — The median home price in Waco is $282,805 and the median rent is $885.91 per month. Housing costs in Waco are 18% below the national average overall. Utilities are 6% above the national average, while groceries are 17% below the national average and transportation is 3% below the national average.
  2. McAllen, TX — The median home price in McAllen is a low $216,875, and housing is 37% below the national average overall. The cost of groceries in McAllen is on par with Waco at 17% below the national average. The cost of a loaf of bread is $2.76 on average and a gallon of milk runs about $1.61.
  3. Harlingen, TX — The median home price in the city of Harlingen, Texas, is $234,9191. Utilities in the city are equal to the national average, but housing, groceries and transportation all fall well below the national average.
  4. Galveston, TX — Buying a home in Galveston comes with a median price tag of $340,032. Utilities are 11% more expensive than the national average, but housing and transportation are well below the national average. Expect to pay about $2.89 for a loaf of bread and $1.68 for a gallon of milk
  5. Abilene, TXTransportation in Abilene is 10% lower than the national average, with gas at about $2.35 a gallon. The median rent in Abeline is $979.39 and the median home price is $312,647. Grocery costs are right on par with the national average. Expect to pay about $3.33 for a loaf of bread and $1.94 for a gallon of milk.

Most expensive places to live in Texas

  1. Fort Worth, TX — Transportation and utilities in the city of Fort Worth are both single-digit percentages above the national average. The median home price is $327,915 and the median rent in the city is $1,027. Expect to pay about $2.74 for a gallon of gas and $168.67 for your monthly energy bill.
  2. Dallas, TX — Utilities in Dallas are 4% above the national average, with the average energy running about $174.84 per month. Housing prices in Dallas are about 5% above the national average, with an average median home price of $364,003. The median rent in Dallas is $1,140 per month.
  3. Irving, TX — The median home price in Irving is $360,997 and the median rent is $1,131 a month. Grocery costs in Irving are 5% above the national average. Expect to pay $3.16 for a loaf of bread and $1.84 for a gallon of milk.
  4. Plano, TX — The median home price in the city of Plano is $419,176 and the median rent is $1,313. Compared to the national average, these numbers account for a 21% higher housing cost. While grocery costs are on par with the national average, transportation is 4% higher in Irving.
  5. Frisco, TX — Expect to pay a premium for housing in the city of Frisco. The cost of housing in this city is 21% above the national average and the median price of a home is $418,641. The median rent for the area is also high at $1,311. Utility and transportation costs are above the national average, but some savings can be found on grocery costs.

*Data source: PayScale

Texas state mortgage resources and intricacies

When it comes to purchasing a house in Texas, your best resources will always be lenders who are licensed to work in the state. Many Texas-based realtors will also have information that can help you navigate the process if you are new to the state. The application, purchase and refinancing processes in Texas are on par with what you might expect in other states.

The effective property tax rate in Texas is 1.81%. When buying a home, this is something you should include when calculating your overall budget. Make sure you’re aware that different cities will have different property tax rates, so take the time to research the area you are looking to move to.

The final word

Texas is a state rich with history and natural and man-made attractions, which can make the prospect of moving to the state seem exciting. Before you go grabbing your saddle and 10-gallon hat, though, you need to make sure you understand the costs of living in Texas, including the average Texas mortgage rates. Once you have a good grasp on what it will cost to live and buy or refinance a house in Texas, you can make the decision that’s right for you.

Jason Lee

Personal Finance Contributor

Jason Lee is a seasoned copywriter with a passion for writing about banking, tech, personal growth, and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill set with the rest of the world.