Texas Mortgage Rates

If you’re house hunting in Texas, you might be wondering about the state’s current mortgage rates. Mortgage rates in Texas change daily, so it’s important to keep tabs on the current rates while in the process of getting a new mortgage or refinancing your existing loan.

The good news is that the rate trends are in your favor. Interest rates in Texas have been at or near record-breaking lows for months, and rates are expected to stay low in the near future. That means if you make the right moves, you could save money the size of Texas on your mortgage loan. Here’s what you need to know on the latest mortgage rates in Texas.

[ Read: What Is a Mortgage? ]

Mortgage Rates in Texas

The mortgage interest rate table below is updated daily to reflect the most current mortgage rates available in the market. According to Bankrate’s latest survey of the nation’s largest mortgage lenders, these are the current average rates for a 30-year fixed, 15-year fixed, FHA and VA mortgage rates.

Product Rate Rate Last Week
30-Year Fixed Rate2.930%2.900%
20-Year Fixed Rate2.740%2.770%
15-Year Fixed Rate2.360%2.330%
10-Year Fixed Rate2.360%2.340%
30-Year FHA Rate2.820%2.690%
30-Year VA Rate3.000%2.750%

Rates data based on Houston, Texas as of 1/14/2021

As of Dec. 7, the average rate on a 30-year, fixed-rate home loan was 2.93%. This percentage is based on a survey of the nation’s largest mortgage lenders. Keep in mind, though, that average rates change daily.

Across the country, average mortgage interest rates have been steadily declining over the last few months. This same trend is being seen in Texas. Last week, the average mortgage rate in Texas was 2.95%, which is slightly below the current percentage, but still extremely low historically.

Data shows that mortgage interest rates in Texas are also down for 15-year fixed mortgages. The current average interest rate for a 15-year fixed mortgage is 2.40%, which is down from 2.42% last week. If you’re considering refinancing, you’re also in luck. The average 30-year fixed refinance rate in Texas is 3.02%, down 0.07% from the week prior.

Texas mortgage rates overview 

Homeownership in Texas is on the rise. Data from the Real Estate Center at Texas A&M University found that total housing sales in Texas grew by 6.3% in Sept. 2020, due in part to historically low mortgage interest rates. At the same time, the median home price in Texas is increasing, especially in major metro areas like Dallas and Austin.

Texas home buyers have several options when it comes to getting a mortgage. The most common mortgages are conventional, FHA, VA and USDA loans. Here is how these loans differ in terms of financing and mortgage interest rates:

  • Conventional loan: You can take out a conventional mortgage to fund a primary home, vacation home or investment property. The interest rates tend to be high, but the overall borrowing costs are usually lower compared to other types of loans. Conventional mortgages are not backed by the federal government.
  • FHA loan: An FHA loan is funded by the Federal Housing Administration (FHA) and is ideal for homeowners who want to avoid a significant down payment or for people with low credit scores. FHA loans require two extra insurance premiums, though, so they can be more expensive than other types of loans.
  • VA loan: VA loans are funded by the Department of Veterans Affairs, and are exclusively for military service members and their families. VA loans don’t require a downpayment and are cheaper overall compared to other mortgage types, but there are strict qualification requirements you’ll have to meet to get one.
  • USDA loan: USDA loans are backed by the U.S. Department of Agriculture and are designed to help low-income individuals purchase homes in rural areas. To get a USDA loan, the home must be located in an eligible area and you have to meet certain income requirements.

Mortgage Rates Trends

In this graph: On , the APR was for the 30-year fixed rate, for the 15-year fixed rate, and for the 5/1 adjustable-rate mortgage rate. These rates are updated almost every day based on Bankrate’s national survey of mortgage lenders.
Toggle between the three rates on the graph and compare today’s rates to what they looked like in the past days.

[ Read: What are the Different Types of Mortgages? ]

First time home buyer programs in the state of Texas

There are several state-backed programs for first-time homebuyers in Texas. One is My Texas First Home, which is part of The Texas Homebuyers Program. This program offers 30-year, low-interest rate mortgages, and homeowners can use up to 5% of the loan mortgage amount to cover down payments or closing costs. The My First Texas Home program does have income and property requirements, and you must have a credit score of 620 or above to apply.

The other first-time home buyer program in Texas is the Mortgage Credit Certificate program. It gives first-time homebuyers a mortgage tax credit that reduces their federal income. Currently, this program is only available to first responders, teachers, veterans and low- to moderate-income families.

Most and least expensive places to live in Texas

Least expensive places to buy real estate in Texas 

The cost of living in Texas has increased in recent years, but there are still many affordable places to purchase real estate. The least expensive places to live in Texas are:

  1. Brownsville: Brownsville, which is located on the southernmost tip of Texas, is the cheapest city in the state. The typical home value is $112,302, according to Zillow, and the average sale price has increased in recent years. 
  2. El Paso: El Paso has a population of roughly 682,669 people, and it’s one of the cheapest places to live in Texas. The typical home value in El Paso is $145,526, an increase of about 7% from the year prior.
  3. Harlingen: Harlingen is located in the Rio Grande Valley and it sits close to the border of Mexico. According to Zillow, the typical home value in Harlingen is $118,194, but the price has been steadily increasing.  
  4. McAllen: McAllen is another cheap place to live in Texas, likely due to its proximity to the Mexican border. The typical home value is $153,165, which is up 7.5% from the year before.
  5. Waco: Waco is an up-and-coming area, but it’s still an affordable place to live. The typical home value in Waco $153,457, which is an increase of 10% from the year prior.

Most expensive places to buy real estate in Texas

Texas is quickly becoming a more desirable place to live and buy real estate. Across the state, the average home cost has increased in recent years. Here are the most expensive places to buy real estate in Texas:

  1. Austin: Austin is home to young families, entrepreneurs and college kids alike. Not to mention, there are many fun activities and attractions in the city. Given the high-paying jobs in the tech industry and the draws of the city, it makes sense that the typical home value in Austin is $427,116.
  2. The Woodlands: The Woodlands is a suburban area that is located about 30 miles outside of Houston, where the typical home value is $371,622.
  3. Sugar Land: Sugar Land is a Houston suburb that has been growing in population in recent years. The typical home value in Sugar Land is $329,115, according to Zillow.
  4. Plano: Plano is a large city located outside of Dallas, and is home to many families and young professionals. The typical home value in Plano is $359,543.
  5. Dallas: Homes in Dallas and the surrounding areas are known for being pricey. The typical home value in Dallas is $236,652, but the actual cost varies vastly by neighborhood.

Texas mortgage rates compared to the national average 

The average mortgage rate in Texas is currently higher than the United States national average rate. This is true for 30-year fixed-rate mortgages and 15-year fixed-rate mortgages. 

When it comes to 30-year fixed-rate mortgages, the average Texas home buyer will pay 2.93%, whereas the average United States home buyer will pay 2.71%. For 15-year fixed-rate mortgages, the average Texas home buyer will pay 3.02%, whereas the average United States home buyer will pay 2.26%, based on Freddie Mac’s weekly averages.

For context, whether it’s in Texas or across the country, these mortgage rates are still extremely low. Mortgage rates have been declining due to the COVID-19 pandemic and the economic downturn that the country has experienced as a result. Many home buyers are taking advantage of these historically low mortgage rates to invest in properties or move from the city to the suburbs.

Already own a home and want to refinance?

If you already own a home in Texas and are thinking about refinancing your mortgage, this is a good time to pull the trigger. The most recent data shows that the average 30-year fixed refinance rate in Texas is 3.02%. Refinancing your home can be tricky, but many homeowners are taking advantage of the current market, given the low mortgage rates.

[ Read: How to Refinance Your Mortgage ]

Experts agree that it’s best to refinance your mortgage when interest rates are low. The market is expected to remain low into 2021, but homeowners should act quickly because the market can be unpredictable. 

Mortgage rates in other states

Arizona
California
Colorado
Florida
Massachusetts
Michigan
New Jersey
New York
North Carolina
Texas

Elizabeth Rivelli

Contributing Writer

Elizabeth is a contributor to The Simple Dollar, where she reviews insurance providers and policies. She has more than three years of experience writing for top online insurance and finance publications, including Bankrate, Coverage.com and Reviews.com.

Reviewed by

  • Angelica Leicht
    Angelica Leicht
    Mortgage Editor

    Angelica Leicht is an editor at The Simple Dollar who specializes in mortgages, mortgage refinancing, home equity loans, and HELOCs. She is a former contributing editor to Interest.com and PersonalLoans.org.