Frequently Asked Questions
How long do I need to stay for buying to make sense in Texas?
In most Texas markets, the break-even point for buying versus renting is typically 3 to 5 years. This depends on home appreciation rates, interest rates, and your down payment. Use our calculator above with your specific numbers to find your personal break-even point. In fast-appreciating areas like Austin or Frisco, the break-even can be as short as 2 years.
What costs are included in the buying calculation?
Our calculator includes the full monthly cost of homeownership: principal and interest on a 30-year fixed mortgage, property taxes (Texas averages around 1.8-2.1%), homeowners insurance, HOA fees if applicable, and Private Mortgage Insurance (PMI) if your down payment is less than 20%. It also factors in equity buildup and home appreciation over time.
Does Texas have any advantages for homebuyers over renters?
Yes. Texas has no state income tax, which effectively increases your take-home pay for mortgage payments. Homestead exemptions reduce your property tax burden. Mortgage interest and property taxes may be tax-deductible on your federal return. Additionally, building equity through homeownership creates long-term wealth that renting cannot provide.
What is PMI and how does it affect the rent vs buy comparison?
Private Mortgage Insurance (PMI) is an additional monthly cost required when your down payment is less than 20% of the home price. PMI typically costs 0.5% of the loan amount annually. It increases your monthly buying cost and extends the break-even period. Once you reach 20% equity through payments and appreciation, PMI can be removed.
Should I rent or buy if I might relocate within 2 years?
If you expect to move within 2 years, renting is usually the better financial decision. Buying involves closing costs (typically 2-5% of the home price), selling costs (agent commissions of 5-6%), and the risk that your home may not appreciate enough to cover these costs. However, if you plan to keep the property as a rental investment, buying could still make sense in high-demand Texas markets.