Texas variant. This is a Texas-specific version of the Refinance Calculator, using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Refinance Calculator.
Refinancing a Texas mortgage makes sense when the monthly interest savings recover your closing costs before you sell or move. On the state's $305,000 median home, even a small rate drop moves real money.
When refinancing pays off in Texas
Closing costs typically run 2-5% of the loan balance. On a $244,000 loan (80% of the $305,000 median home), that's roughly $7,320 at 3%.
Your break-even point is closing costs ÷ monthly savings. Drop your rate enough to save $200/month and you'd recover $7,320 in about 37 months - refinance only if you'll stay past that point.
About taxes and housing in Texas
Texas has a constitutional ban on a state personal income tax, relying instead on sales and property taxes.
Texas offsets the lack of an income tax with relatively high property taxes near 1.68%, while median home values are around $305,000.
Texas has one of the largest state economies in the nation, led by energy, technology, manufacturing, and trade.
Worked example: break-even in Texas
Loan $244,000, closing costs ≈ $7,320 (3%). If a refinance cuts your payment by $250/month, break-even ≈ 29 months. Use the calculator above with your actual rates and balance.
Quick reference
- State income tax: No state income tax (constitutional ban)
- State sales tax: 6.25% (plus 1.95% avg local)
- Median home value: $305,000
- Median household income: $75,780
- Effective property tax rate: 1.68%
- Avg auto insurance: $2,018/yr
Frequently Asked Questions
Is it worth refinancing in Texas?
It depends on your break-even: closing costs divided by monthly savings. If you'll keep the home past break-even, refinancing usually pays off.
What are typical closing costs in Texas?
Refinance closing costs generally run 2-5% of the loan, or roughly $7,320 on a median Texas loan.