The Real Math of Housing · Part 3 of 7 · A Texas United Mortgage Educational Series
Here is where the math becomes important.
Same loan term, very different payment
Consider two hypothetical purchases with the same down-payment percentage. Both use a fully amortizing, 30-year fixed-rate loan with 360 monthly payments. A 15% decline in price therefore produces a 15% decline in the amount borrowed.
| Scenario | Amount borrowed | Annual interest rate | Monthly principal and interest |
|---|
| Original purchase | $500,000 | 4% | $2,387.08 |
| Price and loan amount fall 15% | $425,000 | 8% | $3,118.50 |
The buyer borrows $75,000 less but pays approximately $731 more each month in principal and interest—an increase of 30.6%.
These are illustrative interest rates, not APRs or loan offers. Payments exclude taxes, insurance, HOA dues, mortgage insurance, and closing costs.
That is why saying, "Higher rates will make houses cheaper," does not tell the whole story.
The sales price might come down.
That does not necessarily mean housing becomes more affordable.
Buyers live on monthly payments.
Budget beyond principal and interest
Depending on the property and loan, buyers may also have:
Property taxes.
Homeowners insurance.
HOA expenses.
Repairs.
Maintenance.
Utilities.
And potentially mortgage insurance.
We believe buyers should understand the entire housing expense, not just the sales price or interest rate.
The real question is:
What does this house cost you every month, and what are you receiving in return?
That is the calculation that matters.
Use estimates for the property you are buying, rather than assuming the seller’s tax bill or insurance premium will be yours. Also consider how much cash remains available for emergencies after closing. The CFPB’s homebuying budget guide explains why these costs belong in the decision.
Our rates today vs. our last update and the national average
Rates as of Friday, October 23, 2026. These figures are a snapshot from that date and will not update. For current pricing, see today’s Texas mortgage rates.
As in Parts 1 and 2, we compare against the Optimal Blue Mortgage Market Indices, published daily by the Federal Reserve Bank of St. Louis and based on actual rate locks covering more than a third of U.S. mortgage transactions. We also show how our own posted rates have moved since our last update on October 15.
| Loan type |
Texas United: Oct. 15 → Oct. 23, 2026 |
National average interest rate |
Our rate vs. national average |
| Conventional 30-year fixed |
6.875% → 6.750% (6.861% APR), down 0.125 |
7.25% (Optimal Blue, Oct. 22) |
0.50 lower |
| Conventional 15-year fixed |
6.125% → 6.000% (6.199% APR), down 0.125 |
6.68% (Freddie Mac, week of Oct. 22)* |
0.68 lower |
| FHA 30-year fixed |
6.500% → 6.375% (7.213% APR), down 0.125 |
7.02% (Optimal Blue, Oct. 22) |
0.64 lower |
| VA 30-year fixed |
6.499% → 6.375% (6.483% APR), down 0.124 |
6.96% (Optimal Blue, Oct. 21) |
0.58 lower |
*The Optimal Blue 15-year index had not published a current reading at the time of writing, so we use Freddie Mac’s weekly survey for that row. Compare interest rate to interest rate: the national averages are interest rates only, with no APRs published. APR includes costs such as fees and, for FHA loans, mortgage insurance, so it will typically be higher than the interest rate on the same loan. Our posted rates are based on specific rate assumptions, including a 780+ credit score, an owner-occupied home, and one discount point. Your rate will depend on your credit, down payment, loan amount, property type, and the day you lock.
Nationally, rates also eased over the past week. The Optimal Blue 30-year conforming index slipped from 7.36% on October 13 to 7.25% on October 22, and Freddie Mac’s weekly survey showed the 30-year averaging 7.32% for the week of October 22, down from 7.40% a week earlier but still above the 6.19% of a year ago. Mortgage News Daily’s daily index ticked up slightly on October 23 but remains near one-month lows.
Here is what that move means in the terms of this article. On the same $425,000 loan from the example above, the drop in our 30-year conventional rate from 6.875% to 6.75% lowers monthly principal and interest from about $2,791.95 to $2,756.54—roughly $35 a month. That is real money, but it is smaller than the swing you can see between two Houston-area homes with different tax rates, MUD charges, insurance premiums, or HOA dues. The rate is one line on the budget, not the whole budget.
Sources: Optimal Blue Mortgage Market Indices, retrieved from FRED, Federal Reserve Bank of St. Louis, October 23, 2026 (30-year conforming, 30-year FHA, 30-year VA); Freddie Mac Primary Mortgage Market Survey; Mortgage News Daily Rate Index; Texas United Mortgage: today’s mortgage rates in Texas.
Want your own numbers instead of an average? Get a custom quote in a few minutes—no Social Security number and no full application, just a real rate and fee estimate for your scenario.
The Houston-area costs that belong beside the payment
Two homes with the same price and mortgage rate can have different total monthly costs. Texas property taxes are set locally. Check the actual address for its taxing jurisdictions, including any municipal utility district (MUD) tax. Include applicable special assessments, HOA dues, and other recurring charges without counting the same item twice. The Texas Comptroller’s property tax resources explain the local system.
Confirm the exemptions you qualify for with the appropriate appraisal district. Do not assume the seller’s exemptions or tax bill will carry over to your purchase. The Comptroller’s exemption guide is a useful starting point.
Get homeowners and flood insurance quotes for the address before settling on a budget. The Texas Department of Insurance explains that home insurance does not cover flood damage; separate coverage is needed. Ask the insurer about wind and hail coverage and deductibles, too.
For a home in Harris County, use the Harris County Flood Control District’s mapping resources as part of your research. For addresses elsewhere in the Houston region, consult the relevant local floodplain office and FEMA maps. Mapping is one input—not a substitute for an address-specific insurance discussion.
Let’s look at your Houston-area numbers
Bring us the properties you are considering. Texas United Mortgage can help compare estimated payments, cash to close, and ownership costs side by side.
At Texas United Mortgage, we help borrowers in Houston, The Woodlands, and surrounding Texas communities look beyond a rate quote. Our objective is to explain the numbers and help you make an informed real estate decision—even when the answer is to wait.
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No Social Security number. No full application. Real rates and fees for your scenario.
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