How much money do you need to buy your first home in Austin?
On a $400,000 home in the Austin area, a first-time buyer can put as little as 3% down ($12,000), and cash to close lands around $23,000 once closing costs, inspection, and appraisal are counted. The monthly all-in, with taxes, insurance, and mortgage insurance, runs about $3,700 at a 7.28% rate. In today's buyer's market, seller-paid closing costs and Texas down payment assistance can cut that cash number nearly in half.
Watch on YouTube: First Time Home Buyer in Austin: The Numbers Nobody Explains
By Carmen Reese | The CLR Sales Group | November 3, 2026
"Carmen, how much money do I actually need to buy my first house in Austin?"
That is the first question on almost every first-time buyer call I take. And almost nobody has ever added it up for them.
They've been told twenty percent down. They've been told the market is too expensive. And they've been told to just talk to a lender, which is true, but it skips the part where you understand the numbers yourself.
So this post is the math. I'm a former data analyst and a Realtor, not a lender or a CPA. This is how it works, with real numbers, so you walk into that lender conversation knowing what you're looking at.
This is not lending, tax, or legal advice. Dollar figures are illustrations; confirm your numbers with your lender.
The three numbers that decide whether you can buy
Here's the first thing nobody explains: the price of the house is not the number that decides whether you can buy it. Three other numbers do.
- The down payment.
- Cash to close, which is bigger than the down payment (and that surprises people).
- The monthly all-in. Not the mortgage. The whole payment, with taxes and insurance inside it.
If you know those three, you know your answer.
Let's build all three on a $400,000 home in the Austin area, right around where a lot of first-time buyers land. For context, the median home price in the Austin area in August was $412,000, and Williamson County, where Round Rock and Leander are, was just under $400,000 (Unlock MLS, August 2026 report).
Number one: the down payment (it is not 20%)
Twenty percent down on $400,000 is $80,000. If that were the requirement, almost nobody would buy a first home. It isn't. Here are the minimums on our example:
- Conventional loan for a first-time buyer: as low as 3% down, or $12,000
- FHA loan: 3.5% down, or $14,000
- VA loan (veterans): 0% down
- USDA loan: 0% down, if the home is in a USDA-eligible area (and parts of the Austin outskirts are)
So the real answer to "how much down" for most people is somewhere between zero and $14,000 on a $400,000 house. That is a very different conversation than $80,000.
Number two: cash to close
The down payment is not what you bring to the closing table. Cash to close is the down payment plus closing costs, and closing costs in Texas typically run 2% to 4% of the price. Those are the lender fees, the title policy, the appraisal, and the prepaids, which means the first chunk of your property taxes and insurance going into escrow.
On our example:
- Down payment (3%): $12,000
- Closing costs (about 2.5%): about $10,000
- Inspection and appraisal (paid during the contract, not at closing): about $1,100
- Total: about $23,000, all in
Two Texas-specific pieces live inside that number: the earnest money check (usually about 1%) and the option fee (usually a few hundred dollars) you pay when you go under contract. Both get credited back at closing, so they're part of the $23,000, not on top of it.
Hold onto that $23,000. In a minute I'll show you how this market can cut it nearly in half.
Number three: the monthly all-in
This is the number that actually runs your life.
- Principal and interest: about $2,655 a month on a $388,000 loan at 7.28%, the national average 30-year rate on October 1 (Freddie Mac)
- Property taxes: price times the city's combined rate, divided by twelve. In Round Rock with the community college district, that's about 1.87 percent, or roughly $623 a month before your homestead exemption kicks in
- Homeowners insurance: call it $200 a month. This varies a lot by house, so get a real quote early
- Mortgage insurance: roughly $240 a month, because you put less than 20% down. On a conventional loan it falls off later, once you have the equity
Add it up and you're around $3,700 a month. That's the honest number for a $400,000 home right now with 3% down.
For most lenders, the total payment needs to sit under roughly 43% to 45% of your gross income, with your other debts counted. So with little other debt, this payment points to a household income somewhere around $100,000 a year. Lower if you have no car payment and no student loans. Higher if you do.
That's an illustration, not a quote; your lender runs your exact number. But now you can build this for any house in about thirty seconds.
If you want to walk through the loan programs most buyers have never heard of, make sure to attend our next live Homebuyer Webinar.
The Texas programs and the market that change the math
Texas has real down payment assistance, and it is not just for people with very low incomes. Three programs worth asking your lender about:
- TSAHC Home Sweet Texas (Texas State Affordable Housing Corporation): up to 5% of your loan amount toward the down payment and closing costs, as a grant or as a second loan that's forgiven after three years
- TDHCA My First Texas Home (the state housing agency): up to 5%, as a zero-interest second lien that sits behind the main loan
- City of Austin Down Payment Assistance: up to $40,000 for buyers under the income limits, deferred and forgivable over time
Think about what 5% does to our example. On a $388,000 loan, 5% is just over $19,000. That can cover the entire down payment and most of the closing costs.
There are credit score minimums, income limits by county and household size, and some require a homebuyer education class. I'm describing these, not recommending one; which program fits you is a lender conversation, and I ask every first-time client to have it before we look at a single house.
Why this market helps first-time buyers
In a normal market, a first-time buyer pays their own closing costs and takes the rate they're given.
That is not this market. Austin ranks among the strongest buyer's markets in the country right now. In Redfin's most recent data, 82% of homes here sold below asking price (Redfin via CultureMap, September 2026).
When sellers are competing for buyers, they help pay for the purchase. In the contracts my team is writing right now, seller-paid closing costs in the $5,000 to $15,000 range are normal, not exceptional.
Go back to our cash-to-close number:
- Start at about $23,000
- Have the seller cover $10,000 of closing costs (a reasonable ask on a $400,000 home today): you're at about $13,000
- Pair that with a 5% assistance program, and some buyers walk in with almost nothing out of pocket beyond the inspection and the earnest money they get back
Then there's the payment. Instead of asking a seller for $10,000 off the price, which saves you about $60 a month, you can ask for a 2-1 buydown. The seller pays to lower your rate by two points the first year and one point the second.
On our loan, that drops the payment by about $500 a month in year one and about $250 in year two, and it costs the seller roughly $9,000. Same money from the seller, a far bigger difference to your life while you settle in. That's the kind of thing we negotiate on every first-time buyer contract right now.
The two mistakes I see most, and what I'd do instead
Mistake one: shopping by list price. Two houses can be $20,000 apart in price and $50 apart in monthly payment. Or the cheaper one can cost more every month because of taxes and an HOA. Build the all-in for every house you like.
Mistake two: closing with an empty account. Lenders want to see some reserves, and so should you. The water heater does not care that you just closed. If a program or a seller concession lets you keep $10,000 in the bank instead of putting it into the house, that's usually the better move in year one.
So if I were buying my first home in Austin this fall, here's exactly what I'd do:
- Get fully pre-approved first, and make the lender put the assistance programs on the table in that first conversation, not after I found a house.
- Build the monthly all-in for every house I liked and compare homes on that number, not the price.
- Ask for seller-paid closing costs or a 2-1 buydown on every single offer. In this market the worst they can say is no, and most of them don't.
- Keep my reserves, and let the seller and the programs fund as much of the purchase as possible.
- File my homestead exemption the week I closed, because it's free money every year after.
Frequently Asked Questions
Do you need 20% down to buy a house in Austin?
No. A conventional loan for a first-time buyer can go as low as 3% down, FHA is 3.5%, and VA and USDA loans can be 0% down for eligible buyers and areas. On a $400,000 Austin-area home, that puts the down payment between $0 and $14,000 for most first-time buyers.
How much is cash to close on a $400,000 home in Austin?
At 3% down, plan on about $23,000: roughly $12,000 down, about $10,000 in closing costs (Texas closing costs typically run 2% to 4% of the price), and about $1,100 for the inspection and appraisal. Seller-paid closing costs and down payment assistance can bring that number down significantly.
What down payment assistance is available for first-time buyers in Austin?
Three programs to ask your lender about are TSAHC Home Sweet Texas (up to 5% of the loan), TDHCA My First Texas Home (up to 5% as a zero-interest second lien), and City of Austin Down Payment Assistance (up to $40,000 for buyers under the income limits). Credit minimums, income limits, and education requirements apply, and terms change, so confirm eligibility with your lender.
Will a seller pay closing costs for a first-time buyer in Austin?
In this market, often yes. With most Austin homes selling below asking, seller-paid closing costs in the $5,000 to $15,000 range are common on the contracts my team writes, and a seller-paid 2-1 rate buydown is another option that can lower your payment more than a price cut.
What income do you need to buy a $400,000 home in Austin?
With 3% down and a 7.28% rate, the all-in payment is about $3,700 a month. Most lenders want the total payment plus other debts under roughly 43% to 45% of gross income, which points to a household income around $100,000 a year with little other debt. Your lender runs your exact number.
Your next step
The price is not what decides whether you can buy in Austin. Your down payment, your cash to close, and your monthly all-in do, and in this market all three are more flexible than most first-time buyers think.
Make sure to attend our next live Homebuyer Webinar (register here), where we go through the loan programs in detail. And if you want me to build your three numbers on a specific house or price range, book a free 15-minute consult with Carmen.
About Carmen Reese
Carmen Reese is an Austin native and the founder of The CLR Sales Group at Real Broker, LLC. She has been selling homes in the Austin area for almost a decade. Before real estate she worked as a data analyst, and she is a Certified Negotiation Expert, so every pricing and offer decision starts with the numbers. Carmen and her team are RealTrends Verified in the top 1.5% of real estate professionals nationally. She hosts the weekly Homebuyer Webinar and The Austin Homebuyer Academy on YouTube.
Sources: Unlock MLS Central Texas Housing Report, August 2026 (released Sept 15, 2026); Freddie Mac Primary Mortgage Market Survey, Oct 1, 2026 (30-year, 7.28%); Redfin via CultureMap, Sept 22, 2026; TSAHC Home Sweet Texas program page (Oct 2026); TDHCA My First Texas Home; City of Austin Down Payment Assistance and loan minimums via Neuhaus Real Estate guide (updated June 10, 2026); Texas closing-cost and concession ranges via Neuhaus Real Estate (updated May 27, 2026, observational). Payment example assumes a $400,000 price, 3% down, 7.28% rate, 1.87% combined tax rate, $2,400 a year insurance, and 0.75% mortgage insurance. Your numbers will differ.
Carmen Reese, REALTOR® | The CLR Sales Group | Real Broker, LLC | Texas License #711211
