Texas Refinance Rates & Programs 2026

Texas has some of the strictest cash-out refinance rules in the country—and if you don't know them upfront, you'll waste weeks finding out your loan doesn't qualify. I've seen it happen dozens of times. Let me walk you through exactly how refinancing works in Texas, including the constitutional limits, current rates, and smart strategies.

Current Texas Refinance Rates (March 2026)

As of March 19, 2026, here's what Texas homeowners are seeing:

| Loan Type | Average Rate | APR | |-----------|--------------|-----| | 30-Year Fixed Refi | 6.34% - 6.44% | 6.38% - 6.48% | | 15-Year Fixed Refi | 5.43% - 5.65% | 5.47% - 5.69% | | 7/1 ARM Refi | 5.75% - 6.00% | 6.10% - 6.35% | | 30-Year Fixed Cash-Out Refi (TX 50a6) | 6.50% - 6.75% | 6.55% - 6.80% |

Important: Cash-out refinances in Texas come with higher rates (about 0.125% - 0.375% more) due to the additional regulatory requirements and restrictions. More on that below.

Use our refinance calculator to see what you'd pay based on your specific situation.

Texas Section 50(a)(6): The Rules You Must Know

If you're doing a cash-out refinance in Texas, you're subject to Texas Constitution Article XVI, Section 50(a)(6)—one of the most restrictive cash-out refinance frameworks in the country.

Here's what makes Texas different:

80% LTV Cap (Constitutional Limit)

Maximum combined loan-to-value (LTV) is 80%. This is not a lender guideline—it's in the Texas Constitution. Period.

What this means:

• If your home is worth $400,000, the maximum cash-out refinance is $320,000 (80% LTV)
• Even if you have 800+ credit and millions in the bank, you cannot exceed 80% LTV on a Texas cash-out refinance
• This includes all liens combined—if you have a HELOC, it counts toward the 80%

Broker's Tip: If you need to access more than 80% of your home's value, a rate-and-term refinance (no cash out) is NOT subject to the 80% cap. You can refinance up to 95% - 97% LTV if you're paying off your existing mortgage without taking cash out.

12-Day Waiting Period

You must wait 12 days after signing your loan application before you can close. This is not negotiable. You cannot waive it.

This adds 12 days to every Texas cash-out refinance timeline. Plan accordingly.

In-Person Closing Required

Texas cash-out refinances must be closed in person with a notary. Remote online notarization (RON) is not allowed for Section 50(a)(6) loans.

3% Cap on Fees

Total lender fees (origination, processing, underwriting, etc.) are capped at 3% of the loan amount—but that 3% excludes:

• Title insurance
• Appraisal
• Credit report
• Recording fees
• Third-party costs

Most lenders charge 1% - 2% in lender fees, well below the 3% cap. But beware of lenders trying to sneak junk fees in.

One Cash-Out Refinance Per Year

You can only do one Section 50(a)(6) cash-out refinance per 12-month period on a property. If you refinanced last May, you have to wait until next May to do another cash-out refi.

No Prepayment Penalties Allowed

Texas law prohibits prepayment penalties on Section 50(a)(6) loans. If a lender tries to include one, walk away—that's illegal.

Rate-and-Term Refinance vs. Cash-Out in Texas

Here's the critical distinction:

| Feature | Rate-and-Term Refi | Cash-Out Refi (50a6) | |---------|-------------------|---------------------| | Max LTV | 95% - 97% | 80% | | Waiting period | None | 12 days | | In-person closing | Not required | Required | | Typical rate | 6.34% - 6.44% | 6.50% - 6.75% | | Fee cap | No state cap | 3% of loan amount | | Frequency limit | Unlimited | Once per year |

Rate-and-term refinance = You're only paying off your existing mortgage (or mortgage + HELOC), with no cash in hand at closing. You can roll closing costs into the loan, but no extra cash out.

Cash-out refinance = You're taking cash out above paying off existing liens.

Broker's Tip: If you only need $5,000 - $10,000 cash, consider a HELOC instead of a cash-out refi. HELOCs are NOT subject to Section 50(a)(6) restrictions, close faster, and cost less. You keep your low first mortgage rate and tap equity via a second lien.

Texas Refinance Closing Costs

Here's what you'll pay on a typical Texas refinance (based on a $300,000 loan):

| Cost Item | Typical Amount | |-----------|---------------| | Lender origination fee | $0 - $2,500 | | Appraisal | $450 - $650 | | Credit report | $25 - $50 | | Title insurance (refi rate) | $1,200 - $2,000 | | Settlement/closing fee | $300 - $600 | | Recording fees | $50 - $100 | | Survey (if required) | $350 - $500 | | Endorsements (T-19, etc.) | $100 - $300 | | Total typical closing costs | $3,500 - $6,500 |

Texas has no state mortgage recording tax or documentary stamps. That's a huge advantage vs. states like New York or Florida.

However, Texas title insurance is regulated and pricing is set by the state. Title companies charge the same rates, so shop based on service, not price.

Use our break-even calculator to figure out how long it takes to recoup these costs through monthly savings.

Texas Housing Market Conditions (2026)

Houston

• Median home price: $325,000 - $375,000
• High refinance volume due to rate drops
• Oil & gas job market stabilizing
• Average closing time: 40-50 days (12-day waiting period + processing)

Dallas-Fort Worth

• Median home price: $375,000 - $425,000
• Strong job growth, in-migration from California
• Mix of conventional and FHA refinances
• High jumbo volume in Plano, Frisco, McKinney

Austin

• Median home price: $475,000 - $550,000
• Tech sector cooling but market still strong
• High cash-out volume for home improvements, startups
• Appraisals taking longer due to inventory shifts

San Antonio

• Median home price: $275,000 - $325,000
• Large military population using VA IRRRL
• Affordable market, mostly conforming loans
• Fast closes, less appraisal congestion

No State Income Tax: How It Affects Refinancing

Texas has no state income tax. This doesn't directly affect your refinance rate, but it matters for:

1. Debt-to-income (DTI) calculations — Your take-home pay is higher in Texas vs. California or New York, which can help you qualify for a larger loan or better rate tier.

2. Tax deduction strategy — Without state income tax, the mortgage interest deduction is less valuable. Run the numbers: if you're not itemizing deductions federally, a 15-year mortgage (higher payment, less interest) might make more sense than a 30-year.

3. Investment property analysis — If you're doing a cash-out refi to buy rental property, your rental income isn't hit with state tax. Texas is a strong landlord state for cash-out investors.

When Should Texas Homeowners Refinance?

Consider refinancing if:

• Rates are 0.75%+ below your current rate — With Texas cash-out refis taking 40-50 days (due to the 12-day waiting period), you need meaningful savings to justify the time and cost.

• You're switching from ARM to fixed — If you have a 5/1 or 7/1 ARM nearing adjustment, locking in a fixed rate around 6.3% - 6.5% beats future uncertainty.

• You have PMI and 20%+ equity — Texas home values have climbed. If you bought with FHA or conventional with less than 20% down and now have 20% equity, refinancing drops PMI and saves $150 - $300/month.

• You want to consolidate high-interest debt — Cash-out refis at 6.5% beat credit cards at 22%. But remember: you're converting unsecured debt to secured debt. If you can't make the mortgage payment, you lose the house.

Broker's Tip: Don't refinance just because everyone else is. Run our refinance calculator with your actual numbers—current rate, remaining balance, new rate, closing costs—and see if it makes sense for YOU.

How to Get the Best Texas Refinance Rate

Here's what moves your rate:

1. Credit score 740+ — This unlocks the best pricing. Jumping from 700 to 740 can save 0.25% - 0.375%.

2. LTV under 80% — For cash-out refis, you're capped at 80% anyway. For rate-and-term, dropping to 75% LTV vs. 85% LTV can save 0.125% - 0.25%.

3. Full documentation — W-2 income is easiest. Self-employed? You'll need 2 years tax returns, P&L, bank statements. Cleaner docs = better rates.

4. Shop multiple lenders — Rates vary 0.25% - 0.50% between lenders on the same day. Use a mortgage broker (like me) who can shop 20+ lenders, or get quotes from 3-5 direct lenders.

5. Understand overlays — Some lenders won't do Texas cash-out refis at all. Others have tighter overlays (credit score minimums, DTI caps). Find a Texas-friendly lender.

Texas Refinance FAQ

1. Can I do a cash-out refinance on an investment property in Texas?

Yes, but Section 50(a)(6) only applies to homestead properties (your primary residence). Investment properties follow standard Fannie/Freddie rules:

• Max LTV: 75%
• No 12-day waiting period
• No 3% fee cap
• Rates 0.5% - 0.875% higher than primary residence rates

Broker's Tip: If you're refinancing a Texas rental property, you're NOT subject to 50(a)(6) restrictions. You can close faster and sometimes access higher LTV.

2. What if I need more than 80% LTV cash-out?

You have a few options:

• HELOC — Not subject to 50(a)(6). You can get a second lien HELOC up to 90% - 95% combined LTV. You keep your existing low-rate first mortgage and tap equity via the HELOC. Rates are higher (8% - 10% in 2026), but it's fast and flexible.

• Personal loan — Unsecured personal loans don't touch your home equity. Rates are high (10% - 15%), but if you only need $10K - $30K, it's an option.

• Wait and build equity — If you're at 82% LTV and need 80%, wait 6-12 months and make extra principal payments or let appreciation bring you under 80%.

You cannot do a Texas cash-out refinance above 80% LTV. It's unconstitutional.

3. How long does a Texas refinance take?

Rate-and-term refi: 30-40 days (standard timeline)

Cash-out refi (50a6): 40-55 days (adds 12-day waiting period + in-person closing coordination)

Factors that speed it up:

• Clean title
• Fast appraisal turnaround
• Complete documentation upfront
• Choosing a Texas-experienced lender

Factors that slow it down:

• Self-employment income
• Appraisal delays (rural areas, unique properties)
• Title issues (liens, judgments, divorce)
• Lenders unfamiliar with Texas 50(a)(6) rules

4. Can I refinance if I have a HELOC in Texas?

Yes, but:

• Rate-and-term refi: The HELOC stays in place. The HELOC lender signs a subordination agreement (stays in second position). Some charge $200 - $500 for subordination.

• Cash-out refi: You must pay off the HELOC as part of the refinance. The new loan pays off your first mortgage + HELOC + gives you cash (subject to 80% LTV cap).

If your HELOC lender refuses to subordinate, you'll have to pay it off.

5. Are there any first-time homebuyer programs for Texas refinances?

First-time homebuyer programs (Texas State Affordable Housing Corporation, local housing finance agencies) are for purchases, not refinances.

However, FHA and VA streamline refinances don't require first-time status:

• FHA Streamline — If you currently have FHA, you can streamline refi with no appraisal, minimal docs, even if underwater.
• VA IRRRL — If you currently have a VA loan, you can refinance with no appraisal, no income verification (in most cases), and 0.5% funding fee (vs. 2.15% for VA purchase).

Both close faster than standard refinances and avoid Section 50(a)(6) rules (they're not cash-out loans).

6. Should I refinance into a 15-year or 30-year mortgage in Texas?

Refinance to 15-year if:

• You can afford 40% - 50% higher monthly payments
• You're 10+ years into your current mortgage
• You want to own your home free-and-clear before retirement
• Your income is stable and you have 6+ months reserves

Stick with 30-year if:

• You want payment flexibility (you can always pay extra, but you're not locked in)
• You're early in your mortgage (years 1-7)
• You have kids heading to college or other major expenses coming
• You want to maximize cash flow for investing

The 15-year rate is about 0.90% - 1.00% lower (5.43% vs. 6.34% as of March 2026), so you save big on interest. But make sure the payment fits comfortably in your budget.

7. What's the difference between a Texas 50(a)(6) loan and a regular cash-out refinance?

Section 50(a)(6) loans only apply to Texas homestead properties (your primary residence). Here's the comparison:

| Feature | TX 50(a)(6) Homestead Cash-Out | Standard Cash-Out (Investment/Other States) | |---------|-------------------------------|-------------------------------------------| | Max LTV | 80% | 75% - 95% (varies by loan type) | | Waiting period | 12 days | None | | In-person closing | Required | Not required (RON allowed) | | Fee cap | 3% lender fees | No cap | | Frequency | Once per year | Unlimited |

If you're refinancing an investment property in Texas, you're NOT subject to 50(a)(6). Standard Fannie/Freddie cash-out rules apply (75% max LTV, no waiting period).

Next Steps: Get a Texas Refinance Quote

Here's how to move forward:

1. Determine what type of refinance you need — Rate-and-term or cash-out? This determines which rules apply.

2. Check your home value and loan balance — Calculate your LTV. If you're doing cash-out, make sure you're under 80%.

3. Run the numbers — Use our refinance calculator to estimate savings, then check the break-even calculator to see how long it takes to recoup closing costs.

4. Get multiple quotes — Rates and fees vary. Compare apples-to-apples (same loan type, LTV, lock period).

5. Prepare for the 12-day wait — If you're doing a cash-out refi, factor in the mandatory waiting period.

Want a custom quote for your Texas property? Get your personalized refinance quote here — I'll show you current rates, estimate closing costs, and explain whether you're subject to Section 50(a)(6) rules. No obligation.

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About the Author: Bill McCoy is a licensed mortgage broker with 15 years of experience. While based in California, he works with Texas lenders daily and has helped hundreds of Texas homeowners navigate Section 50(a)(6) cash-out refinances and rate-and-term refis across Houston, Dallas, Austin, and San Antonio.