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• Houston mortgage rates are influenced by economic conditions and individual financial factors, too, including your credit history.
• The mortgage rates you’ll find in Texas may be lower than some other states due to the state’s economic stability and its lack of state income tax.
• Choose a fixed-rate mortgage and you’ll have consistent monthly payments over the loan’s entire life.
• Adjustable-rate mortgages (ARMs) work differently, with changeable rates that can go up or down before the loan is repaid.
• You can use an online mortgage calculator to estimate monthly payments and total costs.
• The state of Texas offers resources and programs to make homeownership a reality for first-time buyers and others with budget limitations.
Introduction to Houston Mortgage Interest Rates
For anyone who is looking to purchase a home in Houston, local mortgage rates are a key consideration that can affect how much home you can afford — and what your long-term financial planning will look like. This guide is created to help you understand how mortgage rates are determined and how you can get the best rate. This will be especially helpful if you are buying your first home. How to get your mortgage journey off and running? Start developing an understanding of where rates in Houston come from, and where they may go.
💡Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.
First-time homebuyer programs usually consider anyone who hasn’t owned a home in the previous three years to be a “first-timer.” If you think you might qualify as a first-time homebuyer, you could enjoy special benefits such as lower down payment minimums, grants, and closing cost assistance.
Where Mortgage Rates Come From
The interest rate any homebuyer will pay on the money they borrow through a home loan is influenced by an array of factors. These include the economy as well as the borrower’s credit history and overall financial situation. Let’s break it down:
Economic Factors Influencing Mortgage Rates
• The bond market, and in particular the 10-year U.S. Treasury Note, has long been considered the primary indicator of the direction mortgage rates are headed. When the note’s rate rises, mortgage interest usually moves in the same direction.
• The housing market’s temperature also plays a role. When the housing market cools, more homes become available than there are buyers — when this happens, lenders may lower rates to try to continue attracting customers.
• The rates of inflation and employment also help determine mortgage rates. A strong economy will be one with rising mortgage rates, reflecting an increased demand from borrowers and, often, higher costs for consumer lenders. A recession will most likely bring lower mortgage rates with it.
Borrower Factors Influencing Mortgage Rates
• Your credit score is a significant predictor of the rates you’ll have access to. The higher your score, the lower the rate you’ll likely get.
• Your down payment amount plays a role, too. The larger your down payment, the lower your interest rate, most likely, since borrowers with more equity in a newly purchased property are perceived as a lower default risk by lenders.
• Your debt-to-income (DTI) ratio is also important. Lenders look at your earnings in relation to monthly debts. In general, though there is no hard maximum, mortgage lenders would like to see a DTI ratio of no more than 36%.
The home mortgage loan you choose, both type and term, will also impact your interest rate. We’ll discuss that in more detail as you read on.
See how your debt level may affect your mortgage
Use SoFi’s debt-to-income calculator to determine your personal DTI number.
See how your debt level may affect your mortgage
Use SoFi’s debt-to-income calculator to determine your personal DTI number..
How Interest Rates Affect Home Affordability
Mortgage rates in Houston will have a big impact on your monthly loan payment amount, and for that reason, on how much you can afford to spend on a home. A $400,000 loan, for example, that has a 6.00% interest rate and a 30-year term, requires a payment of $2,398 monthly. If the rate increases to 7.00%, the payment will jump to $2,661 monthly. In 30 years, that one percentage point difference in interest rates will cost you almost $100,000 in interest. That’s a lot of money! You can see just how your interest rate and the term of your loan affect your payment amounts and the total interest you’ll pay on a $300,000 mortgage in the chart below.
Interest Rate
Loan Term
Monthly Payment
Total Interest
6.00%
30-year
$1,799
$347,515
6.00%
15-year
$2,532
$155,863
7.00%
30-year
$1,996
$418,527
7.00%
15-year
$2,697
$185,367
Houston, Texas Mortgage Rate Trends
Looking at historical mortgage rates in Texas and throughout the country can help you get an idea of what the future might hold for Houston’s rates.
Historical U.S. Mortgage Rates
U.S. mortgage rates have always fluctuated. These rates play a key role in the housing market’s ups and downs. Looking at the trends from the 1970s into the 2020s, rates have reached more than 18.00% and less than 3.00%.
The Federal Reserve’s policy decisions and an ever-changing economic environment have proved to be powerful forces in these shifts. If you understand these factors, you will be able to position yourself to make a home purchase that is based on informed decisions.
Historical Interest Rates in Houston
This table shows you how Houston’s mortgage loan rates have compared to the national average in the last decades. The average state rate in Texas is similar to the national rate, but generally remains a bit lower. (The Federal Housing Finance Agency stopped compiling this state-level data after 2018.)
Year
Texas Rate
U.S. Rate
2000
8.03
8.14
2001
7.01
7.03
2002
6.61
6.62
2003
5.81
5.83
2004
5.94
5.95
2005
5.98
6.00
2006
6.71
6.60
2007
6.54
6.44
2008
6.15
6.09
2009
5.04
5.06
2010
4.76
4.84
2011
4.52
4.66
2012
3.59
3.74
2013
3.80
3.92
2014
4.08
4.24
2015
3.79
3.91
2016
3.66
3.72
2017
3.98
4.03
2018
4.57
4.57
Source: Federal House Finance Agency
Types of Mortgages Available in Houston, Texas
A lot of options exist for you when you look at the types of mortgage loans that can help you purchase your home in Houston. Understanding all the options may help you make educated decisions as you proceed through the process.
Fixed-Rate Mortgage
A fixed-rate mortgage is the standard choice when it comes to home loans. They come with interest rates that remain constant over the life of each loan. Such predictability means that your monthly payments will stay the same, and you’ll be able to plan your budget accordingly. Terms generally available on a fixed-rate mortgage include 10, 15, 20, 30, or even 40 years.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages, often referred to as ARMs, tend to start with lower interest rates compared to fixed-rate loans. They are the common choice of homebuyers who believe they’ll sell again before the initial fixed-rate period ends. An ARM gives you a steady interest rate for the first part of the loan’s term, but in time (say, five or seven years), that rate may adjust up or down, depending on what the market is doing. This flexibility will work in a borrower’s favor if rates are falling, but if you hold an ARM, your payment may increase if overall rates go up.
FHA Loan
The Federal Housing Administration (FHA) loan type exists to bring the advantages of homeownership to a broader audience. If you are granted an FHA loan, you’ll have flexible eligibility criteria you can’t get with other loan types, including a low down payment option, and the ability to qualify with a credit score as low as 500. This type of loan could be particularly appealing to you if you qualify as a first-time homebuyer in Houston.
VA Loan
Mortgage loans from the Veterans Affairs (VA) administration are designed for homebuyers who are active military or veterans, having served our country. They’re also available to eligible reservists, National Guard members, and surviving spouses. A benefit of a VA loan is that there is no required down payment, so it’s an option even if you don’t have a bundle of savings. VA loans offer competitive rates and keep mortgage costs down.
Jumbo Loan
In Houston, as in most U.S. cities, the conventional mortgage loan limit in 2025 for the purchase of a single-family home is $806,500. Eyeing a property at a price higher than this figure? A jumbo loan is what you’ll need to finance it. While jumbo loans may come with slightly higher interest rates than conventional loans and stricter qualification requirements, they can help you borrow the funds to purchase the home you really want.
Current mortgage rates by state.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Should You Wait for Interest Rates to Drop?
Whether or not you qualify as a first-time homebuyerr in Houston, you may wonder if you should wait for mortgage rates in Texas to drop. According to current market predictions, rates will likely stay stable through 2025 and 2026. What is the best plan for you? Most likely, to start by carefully considering how ready you are financially. Assess your savings and your credit score, and evaluate overall market conditions; then decide if buying now is the right choice.
One thing every potential homebuyer should know: If interest rates drop after you’ve purchased a home, you can still pursue a mortgage refinance and take advantage of lower rates.
See How Houston’s Costs Stack Up
The cost of living in Houston is higher than other cities in Texas, but still relatively affordable compared to other big cities in the U.S. Houston has a yearly average personal consumption cost of $52,299. This means it costs around $4,358 each month for one person to live there.
The chart shows you how Houston compares to other Texas cities on an index where 100 equals the average cost of living in the U.S.
Texas City
Cost of Living
Amarillo
95.7
Austin
97.4
Beaumont
91.8
Corpus Christi
89.2
Dallas
101.7
El Paso
88.1
Houston
94.2
San Antonio
91.2
Wichita Falls
90.5
How to Get Your Best Possible Rate in Houston
To secure the best rate possible in Houston, you should make an effort to up your credit score and reduce your debt-to-income (DTI) ratio. Conventional loans are a common choice. They typically require a credit score of 620 or higher, but in 2024, the average credit score of approved applicants was 758, according to Experian®, one company that tracks consumer credit scores.
• Improve your credit score by making payments on time and paying down balances on your credit cards.
• Lower your DTI ratio by paying off debts — don’t let balances sit there.
• A higher down payment is a good idea if you can pull together the cash. That chunk of change will most likely help you secure a lower interest rate.
• Lenders may want to make sure you’ve got a steady source of income by looking at your employment history.
• Gather your information and go through the mortgage preapproval process. This can give you a reliable idea of what you can really afford.
• Also, look at government-backed loan programs, which often have lower interest rates than conventional mortgage loans. Read on to find out more about the programs.
A mortgage calculator is a helpful and easy-to-use tool that will let you understand the impact of different interest rates on your loan in Houston. It will tell you how your rate will affect monthly payments over the run of your loan. These calculators take into account the loan amount you request, the term length, and the interest rate of the loan you select, providing a clear and accurate financial picture that will help you make the smartest decisions for you.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Amo payments shown depend on the accuracy of the information provided.
How to Evaluate Loan Offers in Houston
Securing a competitive mortgage rate is a smart move. It can save you a substantial amount over the lifetime of the loan. It’s not only about the interest rate, though. You need to factor in fees, closing costs, and discount points. Once you find a loan offer that feels right, if you’ve gone through the mortgage preapproval process, you are ready to make a bid. You just need to find a home you love.
Houston Mortgage Resources
Texas is home to many resources and programs created to assist homebuyers. If you are buying your first home or if you have limited financial means, you may find the support needed to secure a perfect starter home at a great mortgage rate. You could even be considered a first-time buyer even if you’ve already owned a primary residence, as long as you sold it more than three years ago.
The Texas State Affordable Housing Corporation (TSAHC) nonprofit helps Texans achieve their homeownership dreams through programs and grants. The Texas Homebuyer Program offers down payment assistance programs, too, and assists with closing costs. Take time to explore these and other resources. You can up your chances of securing a favorable mortgage rate in Houston.
If you’re looking for a home in Houston, you’re probably wondering about the closing costs you’ll need to pay. You can typically expect to pay somewhere between 2% and 5% of the final purchase price when buying a home. These costs will vary depending on the value of the property and its location in the city. They typically cover these items:
• Abstract and recording fees related to summarizing the title search.
• Application fee. Your lender will most likely charge you this to process your loan application.
• Appraisal and survey fees. Usually in the $300 to $600 range, these could be considerably higher, depending on the home, its location, and other variables.
• Credit reporting, underwriting, and origination fees may add up to anywhere from $10 to $100 per applicant. Lenders often charge to check your credit score and underwrite fees (often in the $300 to $750 range), and add those charges to closing costs. Origination fees might be 0.5% to 1% of your loan’s value; they cover the costs of the lender creating loan documents.
• Flood certification fee. The lender may require a flood certification stating the flood zone status of the property.
• Title search and title insurance fees: When a title search is conducted to see if any claims on the property in question exist, the buyer typically covers the fee. It’s usually in the $75 to $200 range. Lenders often require title insurance as a protection. This will likely be a one-time fee costing between 0.1% and 2% of the sale price.
As you budget for closing expenses, you might also think about reserving funds for mortgage points. (Mortgage points, which you choose to buy, cost 1% of your mortgage amount per point, and they typically lower your mortgage interest rate by 0.25% per point.)
The Takeaway
Houston’s mortgage landscape is as diverse as this giant Texas city itself, offering a wide variety of options for you if you’re looking to become a homebuyer. Staying informed about current mortgage rates in Houston and investigating assistance programs are important steps for prospective buyers before you take the plunge. Whether it’s your first time as a buyer or you are an experienced homeowner, take advantage of resources you find and the process will be easier and more affordable.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
Shop around and compare offers from multiple mortgage lenders. Zero in on the very best rates. Once you have selected a lender, ask how you can lock in your rate: Rate locks will typically last 30 to 60 days — they are sometimes free, but they often carry a cost that might be between 0.25% and 0.50% of the loan amount.
How do mortgage interest rates work?
Mortgage interest rates are advertised as a percentage, and they basically tell you what it will cost you to borrow the money to purchase a home. Rates are affected by economic conditions, as well as your personal financial history. Fixed-rate mortgages carry stable rates, while adjustable-rate mortgages, known as ARMs, have changing rates. It’s helpful for homebuyers to understand the basics of mortgage rates. Even small rate changes can cost or save you thousands of dollars over a 30-year loan’s life.
Will mortgage rates drop in Houston?
Economists are predicting that mortgage rates in Houston should remain stable into 2026, but no one can guarantee where they will go. Keeping your eye on economic factors such as inflation and the price of Treasury bonds will help you anticipate where rates may be headed. What’s more important than that, however, is to weigh your personal financial readiness as well as your credit situation.
Will Houston home prices go down?
The Houston housing market is influenced by a wide variety of factors, including the state of the economy, both locally and nationally. Supply and demand are also key in a home market. While it is hard to predict the exact direction home prices will go, especially when market volatility increases, a real estate agent with local knowledge can help identify the most important points and figures to consider.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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