How Much House Can I Afford in Texas? (Calculator + Rules)
Most online affordability calculators ignore Texas property taxes — which can add $500–$900 per month to your payment on a $400,000 home. This guide uses real Texas county tax rates to show you your true PITI payment, your maximum home price, and exactly where your income goes.
Texas property taxes are the variable most buyers forget. This calculator builds them in from the start.
Texas Affordability Calculator
Enter your income, debts, and Texas county below. The calculator uses real effective property tax rates and builds your full PITI payment.
The 28/36 Rule Explained
The 28/36 rule is the most widely used affordability guideline in mortgage lending. It sets two limits on how much of your income can go toward debt:
- Front-end ratio (28%): Your total monthly housing payment — principal, interest, property taxes, and insurance (PITI) — should not exceed 28% of your gross monthly income.
- Back-end ratio (36%): Your total monthly debt payments — including housing plus car loans, student loans, credit cards, and other obligations — should not exceed 36% of gross monthly income.
Most national mortgage calculators assume a property tax rate of 1.0–1.2%. Texas counties average 1.7–2.2%. On a $400,000 home, that difference is $280–$400 more per month in property taxes than a buyer in a lower-tax state pays. Always use Texas-specific rates when estimating your payment — or you will overestimate your buying power.
The 28/36 rule is a starting point, not a hard ceiling. FHA loans allow front-end ratios up to 31% and back-end ratios up to 43–57% in some cases. Conventional loans typically allow back-end DTI up to 45–50%. VA loans evaluate your residual income alongside DTI, which sometimes allows higher ratios for eligible borrowers.
What Is a PITI Payment?
PITI stands for Principal, Interest, Taxes, and Insurance — the four components that make up your complete monthly mortgage payment. Lenders evaluate your PITI (not just your P&I) when calculating how much you can borrow.
PITI Breakdown — $400,000 Home in Fort Bend County (20% Down, 7.0% Rate)
Notice that property taxes alone account for 21% of the total PITI in Fort Bend County. This is why buyers who calculate affordability based on principal and interest alone consistently overestimate how much home they can afford in Texas.
Texas Property Taxes by County
Texas has no state income tax, but funds schools, roads, and local government through property taxes — among the highest in the nation. Effective tax rates (what you actually pay as a percentage of market value) vary significantly by county and even by school district within a county.
Fort Bend County
Tarrant County
Dallas County
Travis County
Harris County
Collin County
Williamson County
Bexar County
After closing, file your Homestead Exemption with your county appraisal district. It reduces your taxable home value by at least $100,000 for school district taxes and caps annual value increases at 10%. On a $400,000 Fort Bend County home, the Homestead Exemption can save $1,500–$2,500 per year in property taxes — a meaningful reduction to your effective PITI over time.
Texas Affordability by Income Level
The table below uses the 28% front-end rule with Texas-average property taxes (1.95%), 5% down, a 7.0% rate, $2,400 annual insurance, and no existing debts. Your actual number will differ based on county, credit score, and debt load.
| Annual Income | Max PITI / mo | Max P&I Budget | Est. Max Home Price | Down Payment (5%) |
|---|---|---|---|---|
| $50,000 | $1,167 | ~$750 | ~$115,000 | ~$5,750 |
| $65,000 | $1,517 | ~$1,050 | ~$160,000 | ~$8,000 |
| $80,000 | $1,867 | ~$1,350 | ~$210,000 | ~$10,500 |
| $100,000 | $2,333 | ~$1,700 | ~$265,000 | ~$13,250 |
| $120,000 | $2,800 | ~$2,100 | ~$325,000 | ~$16,250 |
| $150,000 | $3,500 | ~$2,700 | ~$415,000 | ~$20,750 |
| $180,000 | $4,200 | ~$3,300 | ~$505,000 | ~$25,250 |
| $200,000 | $4,667 | ~$3,700 | ~$565,000 | ~$28,250 |
| $250,000 | $5,833 | ~$4,650 | ~$715,000 | ~$35,750 |
All figures are estimates using 7.0% rate, 5% down, 1.95% Texas average property tax, $2,400/yr insurance. No existing debt assumed. Verify with a lender before setting a firm budget.
Debt-to-Income Ratio Rules by Loan Type
Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward monthly debt payments. Lenders use two DTI numbers:
- Front-end DTI: Housing payment only (PITI) ÷ gross monthly income
- Back-end DTI: All monthly debts (PITI + car + student loans + minimums) ÷ gross monthly income
| Loan Type | Front-End Max | Back-End Max | Notes |
|---|---|---|---|
| Conventional | 28% | 45% | Up to 50% with compensating factors (high credit, reserves) |
| FHA | 31% | 43% | Up to 57% with AUS approval and compensating factors |
| VA | No hard limit | 41% | Evaluated with residual income; flexibility for strong profiles |
| USDA | 29% | 41% | Manual underwriting may allow higher ratios |
| Jumbo | 28% | 43% | Stricter guidelines; large reserves typically required |
Lenders use automated underwriting systems (Fannie Mae’s DU and Freddie Mac’s LP) that weigh DTI alongside credit score, down payment, cash reserves, and employment history. A borrower with a 780 credit score and 12 months of reserves may be approved at 50% DTI on a conventional loan. DTI limits are guidelines, not ceilings — which is why pre-approval gives you a more accurate number than any calculator.
How Much Should You Actually Stretch Your Budget?
Getting approved for the maximum amount your DTI allows is not the same as buying the right amount of house. Here’s how to think about the tradeoffs.
The Case for Buying Below Your Maximum
- Texas property taxes rise. Your county appraisal district can increase your assessed value — and your tax bill — by up to 10% per year (capped with Homestead Exemption). A payment that feels comfortable at closing can feel tight 3 years later.
- Homeowners insurance is rising fast in Texas. Hurricane, hail, and flood risk across Texas markets has pushed homeowners insurance premiums up 20–40% in recent years. Budget conservatively.
- Maintenance costs are real. Budget 1% of home value annually for maintenance. On a $400,000 home that’s $4,000/year — $333/month not in your mortgage payment.
- Life happens. Job changes, family expansions, car repairs. A monthly payment at 90% of your DTI limit leaves no margin for any of these.
When Stretching to Your Maximum Makes Sense
- You have strong job security and documented income growth (raises, equity compensation)
- You have 6+ months of reserves after closing
- You’re buying in a high-appreciation corridor (central Austin, Sugar Land near new developments) where equity gain offsets payment stretch
- Your income will increase and the stretch is temporary
Most experienced Texas mortgage advisors suggest targeting a PITI at 22–25% of gross income rather than the 28% maximum. This gives you a $300–$500/month buffer that covers rising taxes, insurance increases, and the inevitable home repair. You can always buy more house later — you can’t easily buy less once you’re in contract.
Frequently Asked Questions
On an $80,000 annual salary, your maximum monthly PITI under the 28% rule is approximately $1,867. After subtracting Texas property taxes (~$430/mo on a $280K home in Harris County) and insurance (~$200/mo), you have roughly $1,237 left for principal and interest. At a 7.0% rate with 5% down, this supports a home price of approximately $210,000–$240,000, depending on your county and existing debts.
The 28/36 rule states that your monthly housing payment (PITI) should not exceed 28% of your gross monthly income, and your total monthly debts should not exceed 36%. Texas buyers must pay close attention to property taxes — Fort Bend and Tarrant counties average over 2.0% annually, which dramatically reduces buying power compared to national calculators that assume 1.0–1.2% rates.
Texas property taxes add significantly to your monthly payment. On a $400,000 home in Fort Bend County at 2.09%, you pay about $697 per month in property taxes alone — that’s $697 that counts toward your 28% front-end limit but provides no equity. Compared to a state with 1.0% rates, a Texas buyer loses about $363/month to extra taxes, effectively reducing their loan budget by $50,000–$60,000 at the same income level.
PITI stands for Principal, Interest, Taxes, and Insurance — the four components of your total monthly mortgage payment. Principal reduces your loan balance. Interest is the cost of borrowing. Taxes are your monthly property tax escrow. Insurance includes homeowners insurance and PMI if applicable. Lenders qualify you based on PITI against your income — not just the P&I portion.
Most Texas mortgage lenders require a total back-end DTI of 45% or lower for conventional loans, and up to 43–57% for FHA loans depending on automated underwriting results. VA loans evaluate residual income alongside DTI, allowing flexibility for eligible veterans. Your DTI is calculated by dividing all monthly debt payments (including the new mortgage) by your gross monthly income.
Both — but for different purposes. The 28% rule and this calculator give you a planning estimate before you talk to a lender. A pre-approval gives you your real number — based on your actual credit score, verified income, debts, and assets. In Texas’s competitive markets, you’ll need the pre-approval letter to make offers anyway, so use this calculator to plan and pre-approval to confirm. The two numbers are often slightly different.
Related Guides
Get Your Real Budget from a Texas Lender
The calculator above gives you a planning estimate. A pre-approval gives you the verified number — so you know exactly what you can offer when the right home comes along.