If you’re eyeing a home in Texas, you’ve probably heard a thing or two about property taxes. Maybe a friend mentioned their surprisingly high escrow payment, or your real estate agent gave you a heads-up during your house hunt. Whatever brought you here, you’re in the right place. At Casey Sullivan Mortgage, we’ve helped folks from Amarillo to Austin—and across all 50 states—navigate mortgage payments, and we know Texas property taxes can be a real curveball. Let’s break down just how these taxes influence your monthly mortgage payment, why they’re higher in Texas, and what you can do to keep your budget on track.
Why Texas Property Taxes Are Unique
Let’s start with the basics. Texas is a bit different from other states because it doesn’t collect state income tax. Sounds great, right? But here’s the tradeoff: local governments rely heavily on property taxes to fund schools, roads, police, fire departments, and other public services. That means, compared to a lot of other states, Texas property taxes pack a bigger punch.
When you buy a home, your annual property tax bill isn’t just a random number. It’s calculated based on your home’s assessed value and the local tax rate, which can vary quite a bit from county to county. If you’re moving from out of state, you might be shocked by the jump in taxes—even if your home price seems reasonable.
Pro tip: Before you fall in love with a home, ask your mortgage team to run the numbers with estimated property taxes included. You want the full picture before making an offer.
How Property Taxes Factor Into Your Mortgage
Here’s where things get real. For most homeowners, property taxes aren’t a once-a-year headache—they’re part of your monthly mortgage payment. When you get a home loan, your lender usually sets up an escrow account. Each month, you pay a twelfth of your estimated annual property taxes (along with your homeowner’s insurance) into this account, and your lender pays the bill when it’s due.
Let’s look at a simple example. Say your annual property tax bill is $6,000. Instead of saving up and paying that all at once, your mortgage servicer adds $500 a month to your payment. That means even if your principal and interest are manageable, property taxes can make your total monthly payment feel a lot heftier.
Pro tip: Don’t just focus on principal and interest when comparing mortgage quotes—always look at the estimated escrow amount for a true sense of your monthly commitment.
Escrow Surprises and Tax Changes
One thing we see all the time at Casey Sullivan Mortgage: folks are caught off guard when their escrow payment jumps mid-year. Why does this happen? Well, your property tax assessment can change. Maybe your county reassessed your home at a higher value, or the local tax rate increased. When that happens, your lender will recalculate your escrow to make sure there’s enough to cover the higher bill. Sometimes you’ll owe a lump sum to make up the difference, or your monthly payment will go up.
This can happen even if you’ve been in your home for years. And if you’re buying new construction or a recently remodeled home, your first-year tax bill might be artificially low (because it was based on unimproved land or the pre-renovation value). The next year, you could see a sharp increase.
Pro tip: After closing, keep an eye on your property tax assessment notices. If you see a big jump, reach out to your lender and ask how it might affect your escrow—and your monthly payment.
Strategies to Manage High Property Taxes
So, what can you do if property taxes are pushing your mortgage payment higher than you’d like? First, remember: you’re not powerless. Here are a few approaches we often recommend:
If you’re still house hunting, look at homes in areas with lower tax rates. Sometimes a few miles down the road can make a big difference. Your mortgage team can pull up estimated tax rates for any property you’re considering.
If you already own your home, check to see if you qualify for exemptions—like the homestead exemption, available to Texas homeowners using the property as their primary residence. Seniors, disabled veterans, and certain other groups may qualify for additional savings.
You can also protest your property tax assessment if you think your home was overvalued. This process takes a little effort, but it can lead to real savings. Local county appraisal districts have information and deadlines for filing a protest.
Pro tip: Mark your calendar for your county’s property tax protest deadline. Set a reminder to review your assessment every year—you could shave hundreds (or thousands) off your annual bill.
Planning Your Budget With Property Taxes in Mind
At Casey Sullivan Mortgage, our team believes in full transparency. When you’re figuring out how much home you can comfortably afford, property taxes are just as important as your loan amount. Don’t get so focused on the purchase price that you overlook the ongoing costs.
A good rule of thumb: When you’re pre-approved for a loan, ask your lender to break down the monthly payment into principal, interest, taxes, and insurance (often called PITI). That way, you can see exactly how property taxes impact your budget.
If you’re refinancing, remember that a higher home value can mean higher taxes, even if you snag a lower interest rate. We’ll walk you through every step so there are no surprises.
Pro tip: Use online mortgage calculators with Texas-specific property tax rates for the most accurate estimate. It’s worth the extra few minutes, trust me.
Working With a Mortgage Team That Gets Texas
There’s a reason so many Texans (and soon-to-be Texans) turn to us for mortgage advice: we know the ins and outs of property taxes here, and we don’t sugarcoat how they’ll affect your payment. Whether you’re a first-time buyer, upgrading to your dream home, or investing in a rental property, you need a team that helps you plan for the full cost of homeownership—property taxes and all.
We’re hands-on, straight-talking, and always happy to run the numbers as many times as you need. Our team will help you spot potential issues with escrow, walk you through your options for exemptions, and make sure you’re never blindsided by a surprise tax bill. If you ever have questions—no matter how small—you can count on us to pick up the phone and talk you through it.
Pro tip: If you’re moving from out of state, be sure to compare your current property taxes with what you’ll pay in Texas. Sometimes the savings on income tax are offset by the higher property tax bill.
Conclusion
Property taxes are a big part of the Texas homeownership equation, and they have a direct impact on your monthly mortgage payment. While they can seem daunting, especially if you’re new to the Lone Star State, a little education and a lot of planning can keep you on solid financial footing. At Casey Sullivan Mortgage, we believe in clear communication and personal service—so you’ll never be left guessing about your escrow or your true monthly cost. Whether you’re just starting your home search or looking to refinance, we’re here to make sure property taxes don’t catch you off guard. Remember: with the right team by your side, you can tackle Texas property taxes with confidence and keep your mortgage payment right where you want it.
