What Can I Afford? How a Houston Mortgage Payment Is Built
See how a Houston mortgage payment is built (principal, interest, property taxes, insurance, HOA and PMI/MIP) with clearly labeled example payments at $250K, $350K and $450K.
your monthly payment is principal and interest + property taxes + homeowners insurance + HOA dues + mortgage insurance. In the Houston area, taxes and insurance can be a big share of the total, so a "mortgage calculator" that shows only principal and interest can badly understate what you'll pay.
Details checked November 1, 2026. Rules, programs and numbers change, so verify with the source before you rely on them.The five parts of a payment
Principal and interest (P&I): the loan payment itself. It depends on the loan amount, the rate and the term.
Property taxes: Texas has no state property tax, but local taxes add up. These include county, city, school district, and special districts like MUDs. Rates vary a lot by address, and lenders usually collect them monthly in escrow. A homestead exemption on your primary residence lowers your taxable value. For example, HCAD lists a $140,000 school-district homestead exemption for Houston ISD.
Homeowners insurance: required by your lender and usually escrowed. Cost depends on the home, roof condition, deductible and location. Flood insurance is separate.
HOA dues: common in Houston-area subdivisions, and lenders count them in your budget.
Mortgage insurance: conventional loans with less than 20% down usually carry PMI, and the cost depends on credit and down payment. FHA loans have an upfront MIP of 1.75% (usually financed) plus an annual MIP of 0.55% for most loans with less than 5% down, per HUD.
Example payments at three price points
These are examples, not quotes, using an FHA loan with 3.5% down:
| EXAMPLE | $250,000 | $350,000 | $450,000 |
|---|---|---|---|
| Down payment (3.5%) | $8,750 | $12,250 | $15,750 |
| Total loan (incl. 1.75% upfront MIP) | $245,472 | $343,661 | $441,849 |
| Principal & interest | $1,673 | $2,342 | $3,011 |
| Property taxes (est.) | $442 | $618 | $795 |
| Homeowners insurance (est.) | $345 | $345 | $345 |
| HOA (example: none) | $0 | $0 | $0 |
| FHA annual MIP | $111 | $155 | $199 |
| Estimated monthly total | $2,570 | $3,461 | $4,351 |
Example assumptions (estimates):
- Rate 7.24%: Freddie Mac's 30-year fixed average for October 29, 2026. That survey covers conventional loans with 20% down, so your FHA rate will differ.
- Property tax 2.12% of price: the sum of the 2025 rates HCAD lists for a home in the City of Houston and Houston ISD, before exemptions. Areas with MUDs can be higher.
- Insurance $4,144/yr: the reported 2025 (preliminary) Harris County average for policies with wind coverage, from Texas Department of Insurance data.
- MIP: HUD's 1.75% upfront and 0.55% annual, shown on the starting balance.
- Closing costs, prepaids and escrow deposits are not included.
Ways to lower your payment
- Use down payment assistance. TDHCA, TSAHC, SETH and some local programs can help.
- Shop lenders. Compare two or three Loan Estimates for the same loan type.
- Claim your homestead exemption after you move in.
- Shop insurance early. Roof condition and deductible matter.
- Check the tax rate by address. Two similar homes can have very different tax bills.
- Ask about HOA dues and any special assessments before you commit.
How lenders decide
Lenders compare your total monthly debts to your gross income (your debt-to-income ratio). Limits vary by loan and program. The best budget is the one you're comfortable living with.
Frequently asked questions
How much house can I afford in Houston?
It depends on your income, debts, down payment, rate, and the taxes, insurance and HOA dues on the specific home. A lender pre-approval gives you the real number.
What is PITI?
Principal, interest, taxes and insurance, the core of a monthly mortgage payment. Add HOA dues and mortgage insurance for the full picture.
What is the property tax rate in Houston?
It varies by address. For a City of Houston / Houston ISD home, the 2025 rates HCAD lists add up to about 2.12% before exemptions. Other areas, especially those with MUDs, differ.
How much is FHA mortgage insurance?
HUD's upfront MIP is 1.75% of the base loan. The annual MIP is 0.55% for most loans with less than 5% down.
Why is my real payment higher than online calculators show?
Many calculators show only principal and interest. Houston-area taxes and insurance add a lot.
Sources: Freddie Mac PMMS · HUD Mortgagee Letter 2023-05 · HCAD jurisdiction data · TDI homeowners insurance market overview · Texas Comptroller: Property Tax Basics
Equal Housing Opportunity · Brokered by Walzel Properties · TREC Information About Brokerage Services · TREC Consumer Protection Notice. This article is general information, not legal, tax or financial advice.