The average monthly mortgage payment in Texas has declined over the past year, due to falling home prices and mortgage rates in 2025.
Here are five things to know right up front:
- Home prices in Texas have declined over the past year.
- Mortgage rates have also declined in recent months.
- As a result, monthly payments are now more affordable.
- First-time buyers in Texas pay an average of $2,562 per month.
- Home buyers in general have an average payment of $2,358.
Average Down Payment for Texas Home Buyers
In Texas, down payments can range from 0% to 20% of the home’s purchase price, depending on the type of mortgage loan and other factors.
A snapshot of different loan programs:
- VA loans for military members allow for 0% down.
- FHA loans require a minimum investment of 3.5%.
- Minimum down payments for conventional loans range from 3% to 10%.
According to the National Association of REALTORS, the average down payment for first-time buyers is 9%, while the average among all buyers is 18%.
Average Monthly Mortgage Payments in 2025
We can estimate the average monthly mortgage payment in Texas by looking at the median home price and applying current mortgage rates along with standard assumptions for down payment, loan term, taxes, and insurance.
For this calculation, we’ll use the average rate for a 30-year fixed-rate mortgage loan, since that’s the most popular home loan product in Texas.
Here are the numbers as of early fall 2025:
- Current median home value in Texas (per Zillow): $300,079
- Average down payment among first-time buyers (per NAR): 9%
- Average down payment among all home buyers (per NAR): 18%
And here’s what the monthly payments would be:
- Average for first-time buyers (9% down): $2,562 per month
- Average all home buyers (18% down): $2,358 per month
(Note: This calculation uses typical home insurance and property tax rates in Texas, but these can vary from one county to the next.)
Texas Housing Costs Have Declined in 2025
Home buyers in Texas currently have an opportunity to capitalize on a more affordable housing market, which could lead to smaller monthly payments.
The median home value in Texas is currently (Sept. 2025) at its lowest level since March 2022, a sharp reversal from the peak prices of the pandemic era.
According to the latest reading from Zillow: “The average Texas home value is $300,079, down 2.5% over the past year.”
At the same time, the average rate for the popular 30-year fixed mortgage has dropped to its lowest level since October of 2024.
A September 11 report from Freddie Mac stated:
“The 30-year fixed-rate mortgage fell 15 basis points from last week, the largest weekly drop in the past year. Mortgage rates are headed in the right direction and homebuyers have noticed, as purchase applications reached the highest year-over-year growth rate in more than four years.”
The dual decline in home prices and borrowing costs has increased affordability for Texas home buyers, reducing the typical monthly mortgage payment compared to previous years.
How to Reduce the Size of Your Payments
Home buyers in Texas are not powerless when it comes to the size of their mortgage payments. There are certain things you can do to reduce your monthly housing costs.
Buying a cheaper home is the first and most obvious strategy. But there are other cost-reducing strategies as well:
- Put more money down up front. Bigger down payments shrink the loan and reduce both principal and interest (though they require more cash at closing).
- Avoid PMI. Home buyers who keep the loan-to-value ratio at or below 80% can avoid paying private mortgage insurance (PMI), resulting in a lower monthly payment.
- Choose a longer repayment term. Extending the mortgage term (e.g., from 15 to 30 years) reduces the size of the monthly payments.
- Shop lenders and compare rate quotes. According to Freddie Mac, getting multiple lender quotes can save $600 – $1,200 per year (or roughly $50 – $100 per month).
- Buy discount points. Home buyers can pay extra at closing to lower the interest rate and reduce monthly payments. It can be a smart strategy if you plan to stay put for a while.
- Consider an ARM. Adjustable-rate mortgages (ARMs) often start with a lower rate than fixed loans, which reduces the mortgage payments. But the rate could rise later.
- Improve your credit. A higher credit score could help you qualify for a lower interest rate, which will significantly reduce your monthly payments and the total amount of interest paid over the long term.
- Refinance if rates drop. If interest rates fall significantly after you buy a home, you could refinance your mortgage to a new loan with a lower interest rate.
Note: Some of these strategies might not apply to your particular situation. So be sure to do your homework and explore all of your financing options.
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