How Much House Can You Afford in Austin?

The number a lender approves you for is the most you can borrow. It is not always the number that lets you sleep at night. Before you start touring, it helps to know both.

What goes into your monthly payment

Your mortgage payment in Texas is more than principal and interest. It usually includes:

• Principal and interest on the loan
• Property taxes, which are a big line item in Texas because there is no state income tax
• Homeowners insurance
• Mortgage insurance if you put less than 20% down on a conventional loan
• HOA dues, if the home has them

Property taxes surprise a lot of people, especially those moving from other states. They depend on the home's appraised value and the combined rates of the taxing units where the home sits, like the county, city, school district, and any special districts. Two homes at the same price can have very different tax bills.

Start with your monthly comfort zone

Instead of starting with a price, start with a monthly payment you feel good about. Look at your take home pay, your other debts, and what you want left over for savings and life. Then work backward with your lender to a price range.

Do not forget cash to close

You need cash for your down payment, closing costs, and reserves. Down payments can be lower than people think. Many loan programs allow 3% to 5% down, and some allow less. Closing costs for buyers in Texas often include lender fees, prepaid taxes and insurance, title fees, and the survey if one is needed.

Leave room for the first year

The first year in a new home usually comes with surprise costs: a water heater that is on its last legs, a few pieces of furniture, a fence repair. I like when buyers keep a cushion after closing instead of putting every dollar into the down payment.

Use the Austin market to your advantage

In September 2026, homes in the City of Austin closed at 92.5% of list price on average, according to the Unlock MLS Central Texas Housing Report. That tells you buyers have room to negotiate on many homes. Negotiating price, or asking for closing cost help, can change what is affordable for you.

The bottom line

Your budget is personal. Get preapproved, pick a monthly number that feels right, and search a little below the top of your approval so you have room to compete and still feel comfortable after you move in.