Most buyers focus on the purchase price. But the number that actually shapes your monthly budget — and your life — is how much it costs to own a home every single month after closing. In Texas, that number is almost always higher than buyers expect, and it has nothing to do with the mortgage payment alone.
Here is a realistic, complete breakdown of what Texas homeownership actually costs each month, built around a $400,000 home in a typical DFW suburb like Frisco, Prosper, or Mansfield.
Principal and Interest: Your Base Mortgage Payment
Start with the mortgage. On a $400,000 home with 20% down ($80,000), you are financing $320,000. At a 7% fixed rate on a 30-year loan, your principal and interest payment comes to approximately $2,129 per month.
That number does not change month to month — it is your anchor. Everything else is layered on top.
Property Taxes: The Texas Tax Nobody Warns You About
Texas has no state income tax, but it funds that tradeoff largely through property taxes — and they are among the highest in the country. Most DFW suburbs carry an effective rate between 2.0% and 2.4% of assessed value per year, sometimes higher in newer master-planned communities with municipal utility districts (MUDs).
On a $400,000 home at 2.2%, that is $8,800 per year — or $733 per month. In a city like Frisco or Celina where MUD rates stack on top, that figure can push closer to $900–$1,000 per month on the same purchase price.
This is the single most misunderstood cost in DFW real estate. Buyers see a price they can afford and overlook that Texas property taxes can add $700–$1,000 to the monthly payment before anything else is counted.
Homeowners Insurance: Texas Is an Expensive State to Insure
Texas is the second-largest market for homeowners insurance claims in the country, driven by hail storms, tornadoes, and increasingly severe weather across North Texas. Expect to pay $2,000 to $4,000 per year for a standard HO-3 policy on a $400K home — meaning $167 to $333 per month.
Some zip codes in DFW, particularly those that have absorbed significant storm losses, run even higher. If your home has a wood shake roof or is in a flood zone, budget toward the top of that range and add a separate flood policy.
PMI: What You Pay When You Put Less Than 20% Down
If you put down less than 20%, your lender will require private mortgage insurance. On a $400,000 purchase with 5% down ($20,000), PMI typically runs 0.5% to 1.5% of the loan amount per year — roughly $158 to $475 per month on a $380,000 loan.
PMI is not permanent. Once you reach 20% equity — through payments, appreciation, or a combination — you can request removal. But in the early years of ownership, it is a real line item that belongs in your budget.
HOA Fees: Zero to $500+ Depending on Where You Buy
Homeowners association fees vary more than almost any other cost in DFW real estate. In older established neighborhoods, there may be no HOA at all. In newer master-planned communities — Viridian in Arlington, Harvest in Northlake, Sandbrock Ranch in Aubrey — HOA fees commonly run $100 to $250 per month and include amenity centers, trails, and community pools.
Luxury high-rise or gated communities can run $400 to $600 per month or more. Always ask for the HOA documents before you close, and read the budget. Under-funded HOAs issue special assessments.
Utilities and Maintenance: The Costs Buyers Underestimate Most
A 2,400-square-foot DFW home typically runs $200 to $350 per month in utilities — electricity, water, gas, and trash. Summer cooling bills in Texas are genuinely high. Factor in internet and you are likely looking at $250–$400 monthly for a full household.
For maintenance, the industry standard is the 1% rule: budget 1% of the home's value per year for repairs and upkeep. On a $400,000 home, that is $4,000 annually — or $333 per month set aside. HVAC servicing, roof repairs, plumbing, appliances — it adds up faster than most first-time buyers expect.
Full Monthly Cost Example: $400K Home in a DFW Suburb
| Cost Category | Monthly Estimate |
|---|---|
| Principal + Interest (7%, 20% down) | $2,129 |
| Property Taxes (2.2%) | $733 |
| Homeowners Insurance | $250 |
| PMI (if applicable) | $0 (with 20% down) |
| HOA Fees | $150 |
| Utilities | $300 |
| Maintenance Reserve (1%) | $333 |
| Total Monthly Cost | $3,895 |
That is nearly $4,000 per month on a $400,000 home — assuming you put 20% down and land in a moderate-HOA community. With less down or higher taxes, you are over $4,200.
How This Compares to Renting in DFW
A comparable three-bedroom rental in the same DFW suburbs — Frisco, Allen, Mansfield — was running $2,200 to $2,800 per month as of late 2022. On paper, renting looks cheaper by $1,000 or more per month.
But renting builds no equity. A $400,000 home appreciating at even a modest 4% per year adds $16,000 in value annually — and every mortgage payment chips away at the principal. The true comparison is not monthly cash out the door; it is total cost of housing weighed against long-term wealth accumulation.
The agents at EXL Realty Group run this analysis with clients regularly. The right answer depends on your timeline, your down payment, the specific neighborhood, and where you think your life is headed in the next five to seven years. That conversation is worth having before you decide either way.