Property taxes and home insurance. They’re probably not at the top of most people’s minds when buying a home, but they should be. Here’s why.

How much will you pay for insurance and taxes?

On an average single-family mortgage, nearly one-third of the payment goes to property taxes and home insurance. Your tax bill depends on your local tax rate and the value of your property. Your insurance bill depends on location, the property’s age, square footage, and the policy.

You can estimate your costs with a Texas property tax calculator and a Texas homeowner’s insurance calculator.

How will you pay your taxes and insurance?

PITI – it stands for Principal, Interest, Taxes, and Insurance. Along with principal and interest, borrowers commonly roll taxes and insurance into their monthly mortgage payments. The lender holds the taxes and insurance portion in an escrow account and makes payments for the borrower.

It is mandatory to include taxes and insurance in the monthly payments for government-backed mortgages, including VA and FHA loans. It’s possible to pay taxes and insurance separately with other mortgage types, but that’s not the norm; most of our mortgage holders have an escrow account.

Taxes and Insurance Usually Go Up

What you pay the first year of your mortgage probably won’t be the same in the years ahead.

In Dallas County, for example, property taxes rose 32.7% from 2019 to 2024, when residents paid a median of $6,409 annually. The Texas statewide median in 2024 was $5,105.

Property insurance in the U.S. rose at a record rate last year when the average property insurance for a single-family home with a mortgage was $2,290 annually.

The cost of homeowner’s insurance in Texas is higher than the national average; in 2025, Texans are expected to pay an average of $4,400 a year, or about $376 a month. In the Dallas area, that goes up to $5,045 and $420, respectively.

Insurance Isn’t (Always) Forever

With an FHA loan, insurance is required for the life of the loan. For other mortgage types, requirements vary by lender. With most conventional mortgages, once you have reached 20% equity in your home, you can request to remove the insurance.

To learn more about the cost of financing a home, contact a member of the Decker Group at (972) 591-3097 or connect with us online.