Texas Mortgage Rates for September 2019

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In the state of Texas, the average rate for a 30-year fixed-rate mortgage is currently 4.11%. The 15-year fixed-rate average is 3.66%, while the 5/1 adjustable-rate mortgage (ARM) average is at 3.88%.

Loan typeAverage rateWeekly change3-month change
30-year fixed4.11%–0.01%–0.28%
15-year fixed3.66%–0.01%–0.29%
5/1 ARM3.88%–0.01%–0.20%
Rates for a $200,000 loan with 20% down payment
Loan typeAverage rateWeekly change
30-year fixed4.11%–0.01%
15-year fixed3.66%–0.01%
5/1 ARM3.88%–0.01%
Rates for a $200,000 loan with 20% down payment

Just like other interest rates in the economy, mortgage rates see change from week to week. Sometimes, this makes it hard to know whether you've chosen the right time to close on a home loan. To help you answer this question, we compared data on the highs and lows of mortgage rates in the Lone Star State.

How Much Do Texas Mortgage Rates Vary?

Mortgage rates in the Lone Star State can vary by as much as 350 basis points. Among the lenders we researched, the lowest rate for a 30-year loan was 3.25%, while the highest was 6.75%. To understand what this means for borrowers, we calculated the difference in monthly mortgage costs between two loans at these rates.

Using a hypothetical home value of $200,000, we calculated a difference of $122,914 in total interest between the highest and lowest mortgage rates. In terms of monthly principal and interest, that translates to a gap of $341 each month. Though your own numbers will change according to your credit rating and price range, these numbers illustrate what's at stake when you shop for mortgage rates in Texas.

Comparing Home Loan Rates by Bank

Texas mortgage rates also vary depending on which bank or lender you ask for a quote. The graph below illustrates the range of possible rates you may find at five of the state's biggest banks.

Column graph comparing 30-year mortgage rates at major Texas banks

Mortgage rates change often, but the data for Texas show a considerable range of quotes. In real terms, a home loan at the state's lowest reported interest rate has a monthly cost of $697. This is significantly lower than the highest rate, which costs $1,038 each month. When we compare the two rates over a full thirty-year term, borrowers at the lower rate can save as much as $122,914.

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Like all states, Texas is likely to see mortgage rates hold steady in the immediate future. While the Federal Open Market Committee (FOMC) instituted an increase in the target federal funds rate for December 2018, it immediately followed up in January with an announcement that the committee would "be patient" and hold off on additional rate hikes until it has more data on the economic situation.

Line graph of average U.S. 30-year mortgage rates vs. effective federal funds rate since 2014

The federal funds rate isn't a perfect indicator for the behavior of the average mortgage rate, but the two numbers tend to move in the same general direction when given enough time. With the FOMC holding its current target range for the federal funds rate at 2.25%-2.50%, any change in mortgage rates at this time will likely be driven by other factors.

For Texas homebuyers, the current pause in the rate trend opens up an opportunity for more affordable financing. If the FOMC decides to start raising rates again, the cost of a mortgage for any type of property is bound to increase. This makes it a good opportunity for buyers and existing homeowners to shop for better mortgage rates ahead of time.

Comparing Home Loan Rates in Texas Cities

Besides the statewide data, we also looked at mortgage rates in a few of the biggest cities in Texas. We found that rates stay mostly similar throughout the state, whether you apply for a home loan in Dallas or Austin. If you're thinking about moving to another city, home values will play a much bigger role in determining your costs.

MSAAverage mortgage rateMedian home valueEstimated monthly cost
Dallas-Fort Worth-Arlington4.63%$191,726$799
Houston-The Woodlands-Sugar Land4.63%$182,237$760
San Antonio-New Braunfels4.53%$166,018$693
Austin-Round Rock4.62%$266,663$1,109
McAllen-Edinburg-Mission4.63%$87,600$360
Monthly cost shows principal and interest for a 30-year mortgage with a 20% down payment.

As the table shows, it's not so much mortgage rates as local property prices that change from place to place. What you spend on mortgage interest is strongly affected by the price tag on your initial purchase. Still, there are things you can control as a borrower to adjust your mortgage expenses. We'll walk through a practical example to demonstrate.

Evaluating Mortgage Options: An Example in Houston

Houston is one of the largest and fastest-growing metro areas in Texas, which means an active real estate market and plenty of mortgage lending. Given that the median price of an owned home in Houston is around $180,000, we can take a look at how different loan types affect the monthly costs of homeownership in Space City.

Most homebuyers take out a 30-year fixed-rate mortgage, often with a down payment of around 20%. At Houston's median home value and average of 4.74%, that means paying $126,110 of interest by the end of the term. The monthly payments would start at $751 before taxes and insurance. While these numbers aren't too high, they can change drastically if a borrower decides to take a different loan.

For example, a homeowner that wants to move out after five years may want to lower monthly costs without regard for long-term consequences. In this case, the lower initial rate of an adjustable-rate mortgage could be a better fit. If Texas has an average initial 5/1 ARM rate of 4.32%, the loan above would cost $29,765 of interest over the first five years. This is a savings of nearly $3,000 compared to the higher rate on a standard loan.

However, ARM rates begin to move with the market at the end of a fixed-rate period. If you were interested in building equity more quickly, another alternative would be a shorter 15-year mortgage. Not only would you obtain a lower rate—currently 3.66% as opposed to 4.11% on a 30-year loan—you also pay far less interest in total. Of course, a 15-year term does mean much higher monthly payments. In the end, you'll have to choose your loan type based on your own financial needs and goals.

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Get Multiple Mortgage Offers at Once
Get Multiple Mortgage Offers at Once
LendingTree can help you find and compare mortgage rates, all without affecting your credit.
LendingTree is our ultimate parent company
See Offers

on LendingTree's secure website. NMLS #1136: terms and conditions apply

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LendingTree is our ultimate parent company