You saved up for the down payment, you got pre-approved, and you know your monthly mortgage payment almost to the dollar. Here's the problem: that number is only about half the story. The real cost of owning a home in Texas is a lot more than your mortgage — and it blindsides new homeowners every single day.
Below is a breakdown of what it actually costs to own a home in Texas each month, using real Dallas–Fort Worth numbers, plus the levers that can bring that cost down.
Let's Start With the Mortgage
Take a $400,000 home, which is pretty typical around Dallas–Fort Worth. Your principal and interest — the actual mortgage — might run somewhere around $2,100–$2,200 a month depending on your rate and down payment. That's the number everyone focuses on. Now watch what happens when we add everything else.
Cost #1: Property Taxes (The Big One in Texas)
Texas has no state income tax, and the way the state makes up for it is property taxes. In the DFW area, the total tax rate usually lands somewhere between about 1.8% and 2.5% of your home's value, depending on your city and school district.
On a $400,000 home at around 2%, that's roughly $8,000 a year — about $660 a month, just in taxes. On top of your mortgage.
Cost #2: Home Insurance
Texas is one of the most expensive states in the country for home insurance, because we sit right in the path of hail and tornadoes. After the last few hail seasons, rates in DFW have jumped hard. It's not unusual to see homeowners paying somewhere around $300–$400 a month (and in some parts of Fort Worth, even more).
Cost #3: HOA, MUD & PID Fees
If you're buying new construction, there's a good chance the neighborhood has a homeowners association. Many of these communities also have a MUD or a PID — basically an extra tax that paid for the roads and pipes to get the neighborhood built, and that you inherit. It can add anywhere from a modest amount to several hundred dollars a month. (I broke MUDs and PIDs down in a separate video — just know it's a real line item.)
Cost #4: PMI
If you put down less than 20%, you're probably paying private mortgage insurance until you build up enough equity. That's often another $100–$200 a month that a lot of first-time buyers forget about.
Cost #5: Maintenance (The One Nobody Budgets For)
A good rule of thumb is about 1% of your home's value every year. On a $400,000 house, that's $4,000 a year — about $330 a month — set aside for the roof, the AC, the water heater, the fence, and everything else that eventually breaks. It's not optional, it's just delayed.
The Real Number
So let's add it up. That $2,200 mortgage you were budgeting for? Once you stack on taxes, insurance, HOA, PMI, and maintenance, your real cost of owning that home can easily be $3,200–$3,500 a month or more. Sometimes the extras add up to almost as much as the mortgage itself. That's the number that catches people off guard — and it's why some new homeowners feel house-poor the second they move in.
How to Bring That Number Down
The good news: there are real ways to lower it.
File your homestead exemption. If it's your primary home, this lowers your taxable value — Texas raised the school-tax homestead exemption to $140,000 — and it caps how fast your taxable value can rise each year. A lot of people simply forget to file it.
Protest your appraisal every year. It's easier than you think and it genuinely lowers your bill.
Shop your insurance. Don't just auto-renew — rates vary a lot between carriers right now.
Choose your city and neighborhood carefully. That tax rate swinging from 1.8% to 2.5% can be a difference of hundreds of dollars a month on the exact same priced house. This is where a good local agent earns their keep.
Let's Find Your Real Number
If you're thinking about buying anywhere around the Fort Worth area, reach out before you start shopping and we'll figure out your real all-in monthly number together — so nobody gets surprised after closing.
🧭 Grab my free DFW Relocation Guide: http://bit.ly/4w4t8sy 📞 Call or text Mark Hewitt: 817-856-0599 📅 Book a call: https://bit.ly/44wojfM 🌐 HomeforSaleDFW.com ▶️ Watch the full video: https://youtu.be/7cKu65U9oyU
Mark Hewitt leads Hewitt Group, a North Texas real estate team that has helped families buy and sell over 1,000 homes across the Dallas–Fort Worth area.
Hewitt Group, brokered by Real Broker, LLC. TREC #0640931.
Disclaimer: This article is general information only and is not professional, financial, tax, or insurance advice. Rates, taxes, and costs change and vary by property. Confirm current specifics before making decisions.
FAQ
How much does it really cost to own a home in Texas? More than the mortgage. On a typical $400,000 Dallas–Fort Worth home, the mortgage might be around $2,200 a month, but once you add property taxes ($660/mo), home insurance ($300–$400/mo), any HOA/MUD/PID fees, PMI, and maintenance (~$330/mo), the real cost is often $3,200–$3,500 a month or more.
Why are property taxes so high in Texas? Texas has no state income tax, so local governments rely heavily on property taxes to fund schools, cities, and counties. In the DFW area, total effective rates typically run about 1.8% to 2.5% of a home's value, depending on the city and school district — well above the national average.
Is home insurance expensive in Texas? Yes. Texas is one of the most expensive states for homeowners insurance because it sits in the path of hail and tornadoes. After recent hail seasons, DFW premiums have risen sharply, and many homeowners now pay roughly $300–$400 a month or more.
What is a MUD or a PID in Texas? A MUD (Municipal Utility District) or PID (Public Improvement District) is essentially an extra tax common in newer master-planned communities. It helped pay for the roads, water, and infrastructure to build the neighborhood, and homeowners repay it over time — often adding a modest amount to several hundred dollars a month on top of regular property taxes.
How can I lower my property taxes in Texas? Two of the biggest levers: file your homestead exemption on your primary residence (Texas raised the school-tax exemption to $140,000, and it caps how fast your taxable value can rise), and protest your appraisal every year. Shopping your insurance and choosing a city with a lower tax rate also meaningfully reduce your monthly cost.
Is buying a home in Texas still worth it? For many buyers, yes — thanks to no state income tax, strong job growth, and long-term appreciation. The key is budgeting the full monthly cost (taxes, insurance, and maintenance included) before you buy, not just the mortgage payment, so you're not caught off guard after closing.
