How Much House Can I Afford in Texas?

Quick Answer

How much house you can afford in Texas depends on your gross monthly income, your existing debts (your debt-to-income ratio), your credit score, your down payment, current interest rates, and — importantly in Texas — local property taxes and homeowners insurance. Many programs allow total debt-to-income up to about 45%–50% with automated approval; 43% is a common comfort benchmark. Because Texas property taxes are high (combined rates commonly around 1.5%–2.2% of assessed value before exemptions), they take a bigger bite of your monthly payment than in most states, so getting a real pre-approval is the only accurate way to know your number.

The six factors lenders actually weigh

• Gross monthly income — your income before taxes across all qualifying sources.
• Debt-to-income ratio (DTI) — monthly debts plus the new housing payment, divided by gross income. Many programs allow total DTI up to about 45%–50% with automated approval; 43% is a common comfort benchmark.
• Credit score — higher scores unlock lower rates, which raises your buying power.
• Down payment — more down means a smaller loan and lower monthly payment.
• Interest rate — even a half-point swing meaningfully changes what you qualify for.
• Texas property taxes & insurance — folded into your monthly payment via escrow, and higher here than in most states.

Why Texas property taxes matter so much

Texas funds a lot through property taxes, so combined rates commonly run around 1.5%–2.2% of assessed value before exemptions, depending on county and school district. On a $400,000 home that can be roughly $500–$730 a month before homestead exemptions — money that counts against your DTI and reduces the loan amount you qualify for.

The upside: Texas has no state income tax, and the school-tax homestead exemption ($140,000 as of 2025), plus the over-65 and disability exemptions, can reduce your taxable value. A good loan officer models your specific county's rate rather than a national average.

A simple way to estimate

A rough starting point is the 28/36 guideline: aim to keep your housing payment near 28% of gross monthly income and total debts near 36%. But guidelines are blunt — the real answer comes from a pre-approval that uses your actual county tax rate, insurance quote, and loan program.

Use the free Forty Acres mortgage calculators to test purchase price, down payment, and affordability scenarios before you talk to anyone.

Frequently Asked Questions

What income do I need to afford a $400,000 house in Texas?

There's no single number: the income needed for a $400,000 Texas home depends heavily on your interest rate, down payment, and existing debts, and Texas property taxes add meaningfully to the monthly payment. Our mortgage calculator gives a quick estimate. The exact figure depends on your down payment, rate, other debts, and your county's tax rate — a pre-approval gives the precise number.

What debt-to-income ratio do I need to buy a house?

Many programs allow total debt-to-income up to about 45%–50% with automated approval; 43% is a common comfort benchmark — meaning all your monthly debts plus the new housing payment stay under 43% of gross monthly income. Approval at the higher end — FHA and certain automated approvals — typically depends on compensating factors like strong credit or reserves.

Do Texas property taxes really change how much I can afford?

Yes, significantly. Because Texas relies heavily on property taxes (combined rates commonly around 1.5%–2.2% of assessed value before exemptions, depending on county and school district), the tax portion of your monthly payment is larger than in most states and counts against your DTI. Two identical incomes can qualify for very different loan amounts depending on the county's tax rate, so it's essential to use your actual local rate.

Does a bigger down payment let me afford more house?

Yes. A larger down payment reduces the loan amount and monthly payment, which lowers your DTI and can qualify you for a higher purchase price. It can also help you avoid mortgage insurance on a conventional loan (at 20% down) and may earn a slightly better rate.

How accurate are online affordability calculators?

They're great for ballpark planning but tend to use national averages for taxes and insurance, which understates costs in Texas. Treat them as a starting point, then confirm with a pre-approval that uses your real county tax rate, an actual insurance quote, and the specific loan program.