How Much House Can I Afford in Texas? (Simple Breakdown + Real Examples)

How Much House Can I Afford in Texas?

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The Basic Rule of Thumb

Most lenders will look at something called your debt-to-income ratio (DTI).

A general guideline is:

• Housing costs should be around 25–30% of your gross monthly income
• Total debt payments (including your mortgage) should stay under 36–45%

That means your lender will look at your income and compare it to:

• car payments
• student loans
• credit cards
• personal loans
• child support
• and anything else that shows up on your credit report

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What Counts as Your “Monthly Mortgage Payment”?

Your mortgage payment is more than just principal + interest.

Your true monthly payment typically includes:

• Principal & Interest
• Property Taxes
• Homeowners Insurance
• HOA dues (if applicable)
• Mortgage insurance (if your down payment is under 20%)

This is why two homes with the same price can have very different monthly payments depending on the neighborhood tax rate and HOA.

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Texas Property Taxes Matter (A LOT)

In Central Texas, property taxes can vary greatly depending on where you buy.

Some areas have:

• higher school taxes
• MUD taxes
• special improvement districts

So a home in Liberty Hill ISD might have a very different monthly payment than one in Leander ISD — even if the sales price is the same.

This is one of the biggest reasons I always recommend buyers look at monthly payment affordability, not just sales price.

👉 You can estimate property taxes by checking your county appraisal district. Williamson CAD

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Real Examples: What Home Price Fits Your Income?

Here are simple examples based on common buyer budgets:

If your household income is $80,000/year

Gross monthly income: about $6,667
Comfortable mortgage range: $1,800–$2,200/month
Possible home price range: $280,000–$350,000 (depending on rates + taxes)

If your household income is $120,000/year

Gross monthly income: about $10,000
Comfortable mortgage range: $2,500–$3,200/month
Possible home price range: $380,000–$500,000

If your household income is $160,000/year

Gross monthly income: about $13,333
Comfortable mortgage range: $3,300–$4,500/month
Possible home price range: $500,000–$700,000

(These are general examples — taxes, down payment, and debt can change everything.)

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Why Your Down Payment Matters

Your down payment affects:

• your monthly payment
• your loan type
• whether you pay mortgage insurance
• how competitive your offer is

The good news? Many buyers assume they need 20% down, but that’s not always true.

In fact, many of my clients purchase with:

• 0% down (VA loan)
• 3% down (conventional)
• 3.5% down (FHA)
• down payment assistance programs

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Don’t Forget Closing Costs

Another common surprise: closing costs.

In Texas, buyers should generally plan for about 2–4% of the purchase price for closing costs (depending on the loan type).

Some sellers may cover part of this, but it’s important to plan ahead.

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The Best Way to Know What You Can Afford

The most accurate way to answer this question is to have a lender run a full pre-approval and compare:

• your payment comfort level
• your long-term goals
• the current interest rate
• taxes in your target area

I also help buyers compare neighborhoods by monthly cost, not just listing price.

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Final Thoughts

If you’re buying a home in Liberty Hill, Leander, Georgetown, or anywhere in Central Texas, knowing what you can afford is the first step to buying confidently.

If you’d like, I can connect you with a trusted lender and help you build a plan that fits your lifestyle, without pressure.

Looking for more great home buying tip? Check out my other blog post here. What You Need to Know Before Buying Your Home Archives – homesbystephaniegarcia.com

Want help figuring out your realistic price range?
Reach out anytime! I’d love to help.