Image Source
Step 1
a) Select a Soft black brush and start painting all the areas you don't want to affect by the mosaic effect, for example the face.
b) Decrease the brush transparency for the outer parts
c) Keep working decreasing the transparency to the outside; Remember: the parts you don't paint will be the more pixelated.
Step 2
a) Create a new white layer bellow the painted layer
b) Merge the two layers: Select both layers and click command e or Layers - Merge Layers
c) Invert the layer: Image - Adjustments - Invert or: command i
Step 3
a)Select the painted brush layer
b)Select the Channels palette
c) Command click on the Blue Channel Thumbnail
d) Return to the layers palette and hide the brushes layer (click on the eye)
e) Select the model layer and click on the add layer mask (gray rectangle with a white circle) this will add the cyan channel to the mask
Now you can see the mask applied.
Step 4 Add pixel effect
a) Select the subject layer
b) Select: Filter - Pixelate - Mosaic
c) Create a new white layer below the subject
Step 5
a) Open the texture
b) Drag and drop it to the main image, above the subject layer
c) Set the blending mode to overlay
