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Should You Refinance Your Texas Mortgage?

Deciding whether to refinance your home is a major financial milestone. While the primary goal is often to lower your monthly payment, a smart refinance in the Texas market requires looking at the bigger picture—including current interest rates, closing costs, and our state’s unique property tax landscape.

Is Now the Right Time to Refinance in Texas? Depends How Soon You'll Break Even. 

As of early 2026, Texas mortgage rates have shown signs of stabilization, with 30-year fixed rates frequently hovering in the high 5% to low 6% range. If your current interest rate is 1% or higher than today’s available rates, you are likely a prime candidate for refinancing.

However, "the right time" isn't just about the rate. You must consider your break-even point. This is the moment when the monthly savings from your new, lower rate finally "pay back" the closing costs of the loan. If you plan to stay in your Austin, Houston, or Dallas-area home for at least three to five years, refinancing is often a winning strategy. Remember, even if you are promised a "no fee refinance" what's really happening is that the cost to refinance is getting rolled into your new mortgage. So you're going to the bank, borrowing $10,000 or $20,000 to get some savings down the line. That can pay off, but it depends how long it will take.

Understanding the "Texas Factor": Property Taxes & Insurance

Texas homeowners face some of the highest property taxes in the nation, which directly impacts your escrow account. In 2026, the Texas legislature increased the homestead exemption to $140,000 for school district taxes. When you refinance with Texas United Mortgage, we ensure your new loan reflects these updated exemptions, which can significantly lower your total monthly obligation beyond just the interest rate savings.

Common Reasons To Refinance In Texas In 2026

• Lower Your Monthly Payment: The most common reason. Reducing your rate by even 0.75% can save hundreds of dollars monthly on a typical Texas home loan.
• Cash-Out Refinance: With home values in North Texas and the Gulf Coast remaining resilient, many homeowners are using a cash-out refinance to consolidate high-interest debt or fund home improvements.
• Shorten Your Term: Switching from a 30-year to a 15-year mortgage can save you tens of thousands of dollars in interest over the life of the loan.
• Cancel Private Mortgage Insurance (PMI): If your home’s value has increased, you may now have the 20% equity needed to eliminate PMI, further lowering your payment.

How to Use This Calculator

To get an accurate "Should I Refinance" analysis, simply enter your current loan balance, your existing interest rate, and the estimated new rate. Our tool will instantly calculate your monthly savings and show you how many months it will take to break even on the transaction.

Ready to see your personalized savings? At Texas United Mortgage, we specialize in helping Texans navigate the refinance process with transparency and local expertise. Contact one of our loan officers today for a free rate quote and a deep dive into your potential savings.