So You're Ready to Buy in Austin! But How Much Home Can You Actually Afford?

You've been thinking about purchasing a home in Austin, Texas, and now you're wondering: what's next? The most important question isn't what a lender will approve you for – it's what you actually want to spend each month.

The reality is, you'll likely qualify for more than you're comfortable spending. That's why we always start the conversation with your ideal monthly payment, not your maximum one.

Start With What You Know

If you're currently paying $3,000 in rent, that's your baseline. But how does that translate into homeownership? The easiest way to find out is with a mortgage calculator.

Try It Yourself

Zillow has an easy-to-use mortgage calculator that allows you to adjust the home price, down payment, interest rate, and property taxes to see how they affect your monthly payment and help you find your comfort zone. (There are many other mortgage calculators out there as well, so just find one that you like!)

Understanding Your Monthly Payment

When you own a home, your monthly payment includes several components:

Principal & Interest (P&I) – This is the largest chunk of your payment. It's what you're actually paying toward the loan and the interest charged by your lender. Your down payment amount dramatically affects this number. Put down 10%, and you'll have a higher monthly payment. Put down 20%, and you'll lower your payment and eliminate PMI (Private Mortgage Insurance), which is required on any loan with less than 20% down.

For example, increasing your down payment from 10% (above image) to 20% (below image) could keep your monthly payment right around that $3,000 target while eliminating an extra insurance cost.

Property Taxes – This is where local knowledge matters. Make sure you're using a calculator that lets you adjust property tax rates in the advanced settings. In Travis County, property taxes typically range from 1.9% to 2.2%, and these rates—along with your home's assessed value—change annually. (We could write a novel about Texas property taxes, but for now, just make sure you're using accurate local rates in your calculations. Also remember to reset the tax rate on whichever online tool you use!)

Your Next Steps

As you move forward in the home-buying process, your lender will provide a Good Faith Estimate that breaks down your exact monthly payment, closing costs, loan fees, and down payment requirements. But if you're still in the dreaming phase, this simple calculator exercise will point you in the right direction.

Ready to turn those rental payments into equity? Let's talk about what homeownership could look like for you. Give us a call. We'd love to help you take that next step!

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We are delighted to be your guides to Austin and Austin real estate!

Cheers,

Jen & the team

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