| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.277% | 6.347% |
| 15-year fixed | 6.35% | 6.49% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | 6.479% | 7.233% |
Mortgage rates can change on a weekly, daily or even hourly basis. There are a wide variety of factors that can influence what you’ll pay in interest on your loan. The current state of the bond market, your local housing market and even the overall state of the economy can influence mortgage interest rates.
Let’s take a look at what you can expect to pay for a mortgage loan in Texas today. We update this table frequently to reflect the most current rates.
Thinking about finally making the jump from “renter” to “homeowner?” Don’t overpay for your mortgage — read our guide on the best mortgage lenders in Texas before you sign.
What is a Mortgage Rate?
Your mortgage rate is the percentage interest you pay to your mortgage lender in exchange for servicing your loan. Most lenders use the term “annual percentage rate” (APR) to refer to your mortgage rate. Your mortgage rate might stay the same throughout the course of your loan, or it might change as market rates change, depending on the loan you choose.
5 Best Mortgage Lenders in Texas
Before we jump into more information about mortgage rates, let’s take a look at a few of our favorite mortgage lenders offering loans in the Lone Star State.
- Online Service
1. Best Overall: Quicken Loans®
Quicken Loans® is one of the largest mortgage lenders in the country. The lender’s Rocket Mortgage® platform makes it exceptionally easy to get your home loan. The Rocket Mortgage® platform includes information on everything you need to know to choose a loan. Its application process is also so easy that you can complete it from your phone or tablet.
Quicken Loans offers all 3 types of government-backed mortgages as well as conventional and jumbo loan solutions. This makes it an excellent lender for first-time buyers and returning buyers.
- Current Service Members
2. Best for Veterans: Veterans United
Veterans United specializes in offering VA loans, a special type of government-backed mortgage loan for veterans and active-duty service members. Veterans United employs a full team of former service members from each branch in the military. They can help you determine whether you qualify for a VA loan and assist you in getting the documentation you need before you can get a VA loan.
Veterans United also offers conventional loans as well as VA loan solutions. You can quickly get a quote online and Veterans United offers exceptionally affordable rates on its VA loans.
- Banking and Mortgages
3. Best for First Time Home Buyers: Chase
If it’s your first time applying for a mortgage loan, you might not be comfortable entering all of your personal information online. If you prefer to apply for your loan the old-fashioned way, consider getting your mortgage from Chase Bank.
Chase is one of the largest banks in the Lone Star State and has over 600 locations in Texas. Chase offers both conventional and government-backed loans and you can complete your application online or at a Chase location. If you’re the type of borrower who appreciates a more personal touch, Chase might be the right lender for you.
- The Online Experience
4. Best for Online Lender: Better.com
If you’re primarily concerned about getting the best rate possible and finding a mortgage loan ASAP, be sure to get a quote from Better.com. Better.com is a streamlined mortgage platform that has taken steps to remove as many unnecessary steps from the preapproval process as possible. Better.com’s application is so easy to complete that you can finish it from your phone and receive a decision in minutes.
Better.com even offers a Better Price Guarantee that helps ensure that you aren’t overpaying for your mortgage. If you find a better offer from a competing lender, Better.com will match it and give you $1,000 to put toward your closing costs.
- Traditional Lending
5. Best for Self Employed Individuals: Wells Fargo
If you’re self-employed, you might need to submit piles of documentation to be considered for a loan. Most lenders require you to show regular, consistent income, which can be difficult if your income varies from month to month.
With Wells Fargo, you won’t need to worry about digging up years of tax returns. All you need to apply for your loan is a recent profit-and-loss statement and your last 2 months of bank statements. Wells Fargo even offers flexible mortgage loan options to help you customize your loan to fit your income and term needs.
What Factors Impact Your Rate?
How can you get a lower mortgage rate? Your rate might be influenced by:
- Your credit score: The higher your credit score, the lower your mortgage rate. If you have a very low score, you might want to take some time to improve it before you apply for a loan.
- Your down payment: The less money your lender needs to give you, the less risky a candidate you are as a borrower. You can usually secure a lower mortgage rate by bringing a larger down payment to the closing table.
- Your home type: If you’re buying a home that you plan to live in full time, you’ll pay a lower interest rate than if you’re buying a second home or a rental property.
These are just 3 of the largest factors that influence your rate. Your location, loan type, local housing market and more can also influence what you’ll pay for your loan.
What Types of Home Loans Are Available?
There are multiple types of mortgage loans. Let’s take a look at a few different types of loans you can use to buy your first home.
- Conventional mortgage loans are offered by almost every lender and can be used to buy any type of home. You need a credit score of at least 620 points and a down payment of at least 3% to qualify for a loan, and anyone can qualify.
- FHA loans are a type of government-backed mortgage loan that you can use to buy a home with a lower credit score. You can qualify for an FHA loan with a down payment of 3.5% and a credit score as low as 580 points. Some lenders will allow you to get an FHA loan with a credit score of 500 points or higher if you have at least 10% to put down.
- USDA loans are another type of government-backed mortgage loan that can help you buy a home in a rural area. USDA loans have 0% down payment requirements and you can qualify for this type of loan with a credit score as low as 640 points. Your home must be in a sufficiently rural area to qualify and you must live in the home as your primary residence.
- VA loans are government-backed loans for veterans or active-duty service members. You can buy a home with a credit score as low as 620 and a down payment of 0% using a VA loan. You must meet service requirements before you can get a VA loan.
What is the Term for a Home Loan?
Your mortgage term defines your monthly payment and how long you need to make payments on your loan. Let’s take a look at 3 of the most common mortgage terms.
- 30-year fixed-rate loans mean you make monthly payments on your mortgage loan for 30 years before you own your home. The “fixed-rate” portion of the name indicates that your APR will remain the same throughout your entire loan. This means that your payments stay exactly the same from 1 month to the next unless you make an extra payment on your loan or you miss a payment.
- 15-year fixed-rate loans are exactly the same as a 30-year fixed-rate loan, but you only make payments on your loan for 15 years. A 15-year fixed-rate loan might be the best mortgage for you if you want to own your home sooner and you can afford to pay a higher monthly payment.
- 5/1 ARM, or adjustable-rate mortgage, doesn’t keep the same interest rate throughout the term. Instead, your mortgage lender will adjust your mortgage rate as interest rates change. Your rate can go up or down depending on how market rates are changing. However, your ARM will also include a cap that limits how high or how low your interest rate can go.
When you shop for ARMs, you’ll see 2 numbers listed. The first number is the number of years that you’ll enjoy a fixed interest rate when you first take out your loan. The second number is the number of years that will pass between each interest rate adjustment. For example, if you have a 5/1 ARM, your loan will begin with 5 years of fixed interest. From there, your lender will readjust your interest rate every year in accordance with market rate changes.
Calculating Interest in Texas
Is it really worth the time and effort to compare interest rates? While a few percentage points’ difference might not seem like a lot, the truth is that even half a percentage point difference between lenders can save you thousands by the time you pay off your loan.
Let’s take a look at what you might expect to pay in interest on a 30-year fixed-rate loan in a few of Texas’ largest cities.
| City | Average Home Value | Loan Term | Current Rate | Downpayment (20%) | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|---|---|
| Houston | $189,500 | 30-year fixed | 6.805% | $37,900 | $988.82 | $204,375.20 |
| San Antonio | $178,500 | 30-year fixed | 6.805% | $35,700 | $931.42 | $192,511.20 |
| Dallas | $213,200 | 30-year fixed | 6.156% | $42,640 | $1,039.76 | $203,753.60 |
| Austin | $372,200 | 30-year fixed | 6.156% | $74,440 | $1,815.19 | $355,708.40 |
Lender Credit Score Minimums in Texas
Your credit score is a 3-digit number that represents you as a borrower. If your credit score is high, it’s usually because you make your loan and credit card payments on time and you avoid borrowing more money than you can afford to repay. On the other hand, if your score is low, it’s typically because you have a tendency to miss payments or make late payments.
Most mortgage lenders have minimum credit scores that you’ll need to meet before you can qualify for a loan. Let’s take a look at the minimum credit score you’ll need to qualify with some of Texas’s largest lenders.
| Lender | Minimum Credit Score Required |
|---|---|
| Quicken Loans | 620 |
| better.com | 620 |
| Veterans United | 620 |
| Wells Fargo | 620 |
| Chase | 620 |
Find the Right Loan for You
They say that everything is bigger in Texas — but that doesn’t mean your APR needs to be! Leave yourself plenty of time to compare lenders and choose the loan that’s right for you. Remember, a mortgage can be a 30-year commitment, so it’s worth the effort to know all of your options.
About Sarah Horvath
Sarah Horvath is a distinguished financial writer renowned for her expertise in mortgage content. With years of experience in the mortgage industry, Sarah offers invaluable insights into home financing, refinancing, and real estate trends. Her comprehensive understanding of mortgage products, coupled with her ability to simplify complex financial concepts, makes her a trusted resource for homebuyers and homeowners alike. Sarah’s dedication to providing accurate and actionable information empowers readers to navigate the mortgage process with confidence. Whether discussing mortgage rates, loan types, or tips for homeownership, Sarah’s writing is characterized by clarity, reliability, and a commitment to helping individuals achieve their homeownership goals.