How to use this mortgage calculator

This calculator has two tabs. Pick the one that matches the question you’re asking right now.

1. Monthly payment

Enter the home price, your down payment, the loan term, and an interest rate. The calculator returns your full PITI — principal, interest, taxes, and insurance — so you see what you would actually pay each month, not just the loan portion. If you do not know what rate to use, the current average for a 30-year fixed in Texas is a reasonable starting point. We can give you a real, personalized number once you are ready.

2. Amortization

Once you have a payment that looks right, switch to the Amortization tab to see how that payment plays out over the life of the loan. The table breaks down each month into principal, interest, and remaining balance, so you can see exactly when the split tips from mostly-interest to mostly-principal. Use it to test “what if” scenarios — an extra $200/month, a 15-year term instead of 30, or a one-time lump-sum payment — and watch how the payoff date and total interest change. This is where you find the levers that actually move the needle on what a mortgage costs you.

3. Buy vs. rent

Comparing whether to keep renting or buy in Austin? Enter your current rent, the price of the home you are considering, and how long you plan to stay. The calculator projects your net worth in both scenarios over the next 5 to 30 years, factoring in home appreciation, equity build-up, and the closing costs you would need to recoup before buying pulls ahead.

4. Refinance analysis

Already own and wondering if a refi makes sense? Enter your current loan balance, current rate, and a target rate. The calculator returns your monthly savings, total interest saved over the remaining term, and the break-even month — the point at which your savings exceed the closing costs of the refinance.

What goes into your monthly payment

Your monthly mortgage payment has four components, often shortened to PITI:

• Principal — pays down your loan balance. In the early years, this is a smaller share of your payment; over time, it grows.
• Interest — the cost of borrowing money. In year one of a 30-year loan, the majority of your payment is interest. By year fifteen, the split has shifted noticeably toward principal.
• Taxes — Texas property taxes are paid annually, but most lenders collect 1/12 of the bill each month into an escrow account. Effective rates run roughly 1.8% to 2.5% depending on county and ISD.
• Insurance — homeowners insurance is required by every lender and also escrowed monthly. If your down payment is under 20% on a conventional loan, you will also pay private mortgage insurance (PMI) until you reach 20% equity.

Many online calculators only show principal and interest. In Texas, that misses 30 to 40 percent of your real monthly cost. This calculator shows the full PITI from the start so the number on screen is the number that will hit your bank account.

Factors that affect your mortgage payment in Texas

Even with the same loan amount, two borrowers can land on very different monthly payments. Here are the biggest variables:

Credit score

A score of 760 or higher qualifies you for the best advertised rates. Scores in the 680 to 740 range still get approved easily but typically pay 0.25% to 0.625% more in rate. Below 620, you are usually looking at FHA territory rather than conventional. Improving your score by 20 to 40 points before applying can be worth thousands of dollars over the life of the loan.

Down payment

The size of your down payment changes both your loan amount and whether mortgage insurance applies. Conventional loans hit no-PMI status at 20% down. FHA loans require an upfront mortgage insurance premium plus a monthly MIP regardless of down payment. VA loans require no down payment and no monthly mortgage insurance, which is part of why VA is the cheapest option for those who qualify.

Loan type

Conventional, FHA, VA, and jumbo loans all price differently. VA tends to be the cheapest if you qualify. FHA is forgiving on credit but adds insurance costs. Jumbo loans (above the 2026 conforming limit of $806,500 in most Texas counties) can price either above or below conventional depending on the lender and your file.

Loan term

A 30-year fixed gives you the lowest monthly payment. A 15-year fixed builds equity twice as fast and typically costs 0.5% to 0.75% less in rate, but the monthly payment is meaningfully higher. Adjustable-rate mortgages (ARMs) start with a lower fixed rate for 5, 7, or 10 years, then adjust based on a market index. ARMs make sense for buyers who plan to sell or refinance before the reset.

Property tax rate

Texas has no state income tax, which the legislature offsets with above-average property taxes. Rates vary substantially by county and by ISD:

• Travis County (central Austin) — effective rates around 1.8% to 2.2%
• Williamson County (Round Rock, Cedar Park, Leander) — commonly 2.1% to 2.5%
• Hays County (Buda, Kyle, Dripping Springs) — commonly 2.0% to 2.4%

A $500,000 home in central Austin can carry a tax bill of $9,500 to $11,000 per year. The same price in Pflugerville or Hutto might land closer to $11,000 to $12,500. New construction in MUD or PID districts can push effective rates above 3% for the first decade.

Insurance and HOA

Homeowners insurance in Texas runs higher than the national average due to wind, hail, and severe-weather exposure. Expect $1,800 to $3,500 per year for a typical single-family home, sometimes more in hail-prone parts of the Hill Country. HOA fees, if any, are paid separately from your mortgage and are not escrowed. Condos with high HOA dues can change affordability calculations significantly.

Understanding your results

The calculator returns three numbers worth understanding in detail:

Monthly payment

The full PITI figure. This is what posts to your bank account each month. It is the most important number for budgeting because it includes everything that gets escrowed (taxes and insurance) on top of the loan payment itself.

Total interest paid over the life of the loan

On a $400,000 loan at 7% over 30 years, you would pay roughly $558,000 in interest by the end — more than the original loan amount. Reducing your rate by 0.5%, switching to a 15-year term, or making one extra payment per year all reduce this number significantly. The “extra payment” trick is especially effective: one additional principal payment per year on a 30-year loan typically shaves about 4 years off the term and tens of thousands off lifetime interest.

Loan-to-value (LTV) ratio

Your loan amount divided by the home price, expressed as a percentage. Below 80% LTV, you avoid PMI on conventional loans and unlock the best rate sheets. Lenders treat 80%, 90%, and 95% LTV as distinct pricing tiers; getting to 79.9% can be the difference between two meaningfully different rate offers.

Amortization curve

The calculator’s amortization breakdown shows how each payment splits between principal and interest over time. In year 1 of a typical 30-year loan, only about 15% of each payment goes toward principal. By year 20, that share is roughly 60%. Understanding this curve is what makes additional principal payments so powerful — they go entirely toward balance reduction and skip years of compounding interest.

Buying vs. renting in Austin

The buy vs. rent calculator answers a question that simple rules of thumb cannot: how long do you need to stay in a home for buying to come out ahead financially?

In the Austin metro specifically:

• Closing costs typically run 2% to 4% of the purchase price. On a $500,000 home, that is $10,000 to $20,000 in upfront cost you do not recover until you have held the home long enough.
• Home appreciation in the Austin MSA averaged 5% to 7% annually over the 10-year window through 2025, with sharp swings up and down inside that range. The 2020-2022 surge and 2023 correction are both inside that average.
• Renting frees up capital and avoids maintenance, insurance volatility, and property tax exposure, but you are not building equity and your monthly cost typically rises 3% to 6% per year.

The break-even point — where buying pulls ahead of renting in net worth — is usually 5 to 7 years for most price ranges in Austin. If you might move in 2 to 3 years, renting often wins financially even if buying feels like the right move emotionally. If you plan to stay 7 or more years, buying almost always comes out ahead. The middle window (3 to 6 years) is where the calculator’s projection is most useful, because the answer depends on the specifics of your purchase.

When refinancing makes sense in Texas

Refinancing replaces your existing mortgage with a new one. There are two scenarios where running the math is worth it:

Rate-and-term refinance

Rates have dropped at least 0.5% to 0.75% since you closed, and you plan to stay in the home long enough to recoup the closing costs. The break-even point is usually 24 to 36 months — meaning if you might sell or move within 2 years, the refi probably is not worth it.

Cash-out refinance

You have built up equity and want to pull cash out for renovations, debt consolidation, or investment. In Texas, cash-out refinances on a primary residence are governed by Section 50(a)(6) of the Texas Constitution, which adds rules you will not find in any other state:

• The new loan is limited to 80% of the home’s appraised value — you must always leave 20% equity in the home.
• A 12-day cooling-off period is required between the application and closing.
• Total fees on the loan are capped at 2% of the loan amount (with some exclusions for third-party costs).
• Once a property has been used for a 50(a)(6) cash-out, every future refinance on that property must continue to follow the 50(a)(6) rules — even if you are not pulling cash out. This is sometimes called the “once a Texas cash-out, always a Texas cash-out” rule, and it can affect future rates.

The calculator estimates monthly savings, total interest saved, and break-even month. For a real number that accounts for the 50(a)(6) implications and your specific equity position, schedule a call.

What to do after running the numbers

A calculator gives you a directionally accurate estimate. To turn it into something you can shop with, the typical sequence is:

1. Get pre-qualified — soft credit pull, no commitment. Tells you the rate and price range you would actually qualify for given your real income, debts, and credit. Usually takes a phone call or a 10-minute online application.
2. Get pre-approved — hard credit pull plus document review (pay stubs, W-2s, tax returns, bank statements). Comes with a letter you can submit alongside an offer. In Austin’s market, sellers will often refuse to review an offer without a pre-approval letter attached.
3. Lock your rate — once you are under contract, your loan officer can lock your rate for 30 to 60 days while underwriting completes. Locks protect you from rate increases but also prevent you from capturing decreases — though many lenders offer a one-time float-down option.
4. Close — underwriting typically takes 2 to 4 weeks once your file is complete. At closing, you sign the final loan documents, pay your down payment and closing costs, and the home is yours.

If you want a real number based on your actual financial profile — not an estimate — the fastest path is a Discovery Call. 15 minutes, no obligation, and you walk away with quote you can compare against any other lender.

Mortgage Calculator FAQ