Rent vs Buy Calculator — Texas
Texas has no state income tax but a high property-tax rate near 1.8%, plus steep insurance and upkeep. Compare the real costs.
These are estimates using standard formulas (loan amortization and the common 28%/36% guideline). They are not financial or real-estate advice — confirm any number with a lender or broker.
How the numbers are calculated
The calculator totals the cash you would spend buying (down payment, about 3% closing costs, mortgage principal and interest, property tax, insurance, maintenance, and PMI) and subtracts the equity you build, then compares it to total rent minus what your down payment could have earned if invested. The break-even year is when buying pulls ahead of renting on your inputs.
Texas housing facts
Texas has no state income tax but some of the highest property-tax rates in the US (about 1.8% of value). That tax is a large slice of the monthly cost, so Houston and Dallas buyers should watch it closely. Homes are relatively affordable (median near $350k), which balances the tax.
Worked examples
Example: a $350,000 Houston home, 6-year stay
With 20% down at 6.8%, principal and interest is about $1,825 a month. Property tax at 1.8% adds about $525 a month, insurance about $150 and maintenance $180. Total ownership runs near $2,680. Renting the same home at $2,100 a month, buying wins around year 3; at $2,000 rent the break-even is about year 4. The high tax narrows the gap versus a low-tax state.
Example: a $280,000 smaller Texas home
A lower price cuts the loan and the tax dollar-for-dollar. Ownership cost falls near $2,210 a month, close to the rent, pulling the break-even to about year 2. In Texas, a cheaper home tips the math toward buying faster than the income-tax saving does.
No state income tax, but a heavy property-tax load
Texas collects no state income tax, which leaves more take-home pay for a mortgage. But it funds schools and services largely through property tax, with an effective rate near 1.8% — among the highest in the country. That tax shows up every month of ownership and offsets much of the income-tax advantage.
Insurance and upkeep in Texas
Hail, wind and foundation movement make Texas home insurance and maintenance pricier than the national average. The calculator defaults insurance to about $150 a month and maintenance to $180; if your quote is higher, raise them so the comparison stays honest.
When this calculator does not apply
Texas property-tax rates vary sharply by county and school district, and seniors or homestead exemptions can cut the bill. The 1.8% figure is a statewide average, not your specific rate.
Data sources & last update
Tax rates and home prices are typical published values (Tax Foundation, FHFA, state revenue departments, Insurance Information Institute) and are examples updated for 2026. They are not a quote — confirm current figures with a lender or local assessor before acting. HomeMath runs entirely in your browser; nothing you type is uploaded.
Frequently asked questions
Does Texas having no income tax make buying cheaper?
It helps cash flow, since more of your income is available for housing. But Texas offsets it with a high property-tax rate near 1.8% and higher insurance, so the net ownership advantage is smaller than the income-tax line alone suggests.
Why is Texas insurance a big factor?
Hail, wind and soil movement drive above-average home insurance and maintenance costs. Those recurring ownership costs are part of the monthly comparison and can meaningfully delay the break-even year.