What It Really Costs to Buy a Home in Austin

Ask most people what it costs to buy a house and they'll tell you the down payment. That's maybe a third of the real answer. There's closing costs, there's prepaid insurance and taxes, and there's a monthly payment that ends up bigger than principal and interest alone. So instead of tossing out a percentage range and calling it a day, let's run the actual math — every line item — on a $450,000 home in the Austin metro, using real 2026 numbers. That's close to the current median sold price here, so this isn't a hypothetical. It's close to what a typical local buyer is actually working with.

The down payment

On a $450,000 home, here's what the different down payment options actually look like in dollars. A 3% conventional first-time buyer loan: $13,500. FHA at 3.5%: $15,750. 5% down: $22,500. 10%: $45,000. And 20% — the number that avoids mortgage insurance entirely — $90,000. For the rest of this, I'll run the numbers on 3% down, since that's the realistic scenario for most first-time buyers: a $436,500 loan.

Closing costs, itemized

This is the part that usually just gets summarized as "2 to 5% of the purchase price" and left there. Here's what's actually in it. Loan origination fee, typically 0.5 to 1% of your loan amount — call it around $3,275 on this loan. Appraisal fee: $500 to $1,000, so figure roughly $650. Credit report fee: about $35. Then the title company side — an escrow or closing fee, usually $300 to $700; a title search and examination fee, $150 to $400; a document prep fee, $50 to $200; a tax certificate, $50 to $100; and county recording fees, $25 to $50. Add it up and you're looking at somewhere around $5,000 in hard closing cost line items.

Here's a Texas-specific detail that surprises a lot of buyers, and most closing cost articles get this wrong. Texas has two separate title insurance policies — an owner's policy and a lender's policy — and in the vast majority of Central Texas transactions, the seller customarily pays for the owner's policy, not you. On a $450,000 home under the 2026 Texas Department of Insurance rate schedule, that owner's policy runs about $2,509, and it's typically not your bill. What you pay for, as the buyer, is the lender's policy, and when it's issued at the same time as the owner's policy — which is standard practice — it's priced at a heavily discounted simultaneous issue rate of around $100. That's a real difference of roughly $2,400 depending on who's customarily paying what in your specific deal, so confirm it in your contract instead of assuming.

Prepaids: the part nobody explains well

Beyond closing costs, you're also prepaying for things you haven't technically used yet. First, prepaid interest. Your first regular mortgage payment doesn't happen until the month after next, so you owe interest for the partial month between closing and that first payment — on this loan, at a rate in the high 6% range, that's roughly $80 a day. Depending on when in the month you close, expect somewhere between a few hundred dollars and around $1,200.

Second, your first year of homeowners insurance, paid in full, upfront, at closing. In the Austin area, expect somewhere around $2,400 to $3,200 a year for a standard policy — Central Texas homeowners insurance runs higher than a lot of the country because this region sees three to five significant hail events a year, and insurers price for that. Budget around $2,800 for this example.

Third, your property tax escrow cushion. Your lender collects a few months of property tax upfront to build a reserve in your escrow account, and exactly how many months depends on your closing date relative to the local tax calendar. On this home, monthly property tax runs around $776, so that cushion typically lands somewhere between $1,500 and $3,000 depending on timing.

Put it together — prepaid interest, a year of insurance, and the tax escrow cushion — and prepaids alone typically run somewhere around $5,000 to $6,000 on this example.

The real total cash to close

Add it up: $13,500 down payment, roughly $5,000 in closing cost line items, and roughly $6,000 in prepaids. That's about $24,500 in total cash to close on a $450,000 home at 3% down — not the down payment alone, and not a vague percentage. That's the number to actually have sitting in your account.

What you actually pay every month

This is the number people underestimate the most, because they mentally stop at principal and interest. On a $436,500 loan at a rate in the high 6% range over 30 years, principal and interest runs around $2,815 a month. Add property tax at roughly $776 a month. Add homeowners insurance at roughly $233 a month. And since this scenario is 3% down — well under the 20% threshold — add private mortgage insurance, which typically runs somewhere between $150 and $300 a month depending on your credit and loan details.

Add all four together and you're looking at somewhere around $4,000 a month — not the roughly $2,800 that principal and interest alone would suggest. And if you're buying into one of the newer master-planned communities that make up a lot of new construction around Austin, add an HOA fee on top of that, which can run anywhere from under $100 a month in some communities to $300 or more in others — and in some developments, additional MUD or PID fees stack on top of the HOA itself. Ask for the exact HOA, MUD, and PID numbers before you write an offer, not after.

The property tax reality in Texas

Texas has no state income tax, and property tax is how the state makes up for it. In Travis County, the combined rate across the city, county, school district, and other taxing entities works out to roughly 2.07% of assessed value — among the higher effective rates in the country. That's the roughly $9,300 a year, or $776 a month, in the numbers above.

Here's the part that catches new buyers off guard: the homestead exemption that lowers your taxable value doesn't apply automatically the moment you close. You have to file for it, and depending on timing, the savings may not show up until the following tax year. Once it's in place, though, it's real money — Texas voters raised the school-district homestead exemption to $140,000 in 2025, and Travis County adds its own 20% homestead exemption on top of that. File for it as soon as you're eligible. It's free, and skipping it just means paying tax on value you don't have to.

What year one actually costs beyond the mortgage

Once you're in the home, the standard rule of thumb is to budget 1 to 3% of your home's value per year for maintenance and repairs — on a $450,000 home, that's $4,500 to $13,500 a year, with newer homes landing at the low end and older homes with aging systems landing toward the high end. That's on top of your mortgage payment, not instead of it, and it's the number people forget to plan for until something breaks.

One more genuinely good piece of Texas-specific news: unlike states such as New York, Illinois, or California, Texas charges no real estate transfer tax at all. That's a cost that simply doesn't exist here, and it can run into the thousands of dollars in states that do have it.

So here's the real answer, all the way through: on a $450,000 Austin-area home with 3% down, plan on roughly $24,500 in total cash to close, and roughly $4,000 a month once you factor in principal, interest, taxes, insurance, and mortgage insurance — plus $4,500 to $13,500 a year in ongoing maintenance once you're in. That's what it really costs. Not a percentage range — the actual number, so you walk into this with your eyes open instead of finding it all out at the closing table.