More Than a Mortgage: The Cost of Owning a Home

Your mortgage is only one cost of owning a home—here are the rest

Pewter and white-trimmed large suburban house and yard.
Your mortgage is only one cost of owning a home—here are the rest. Photo:

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Your mortgage payment is only one portion of the overall cost of owning a home. Beyond that large expense, there are still many additional ones you’ll need to budget for, if you’re planning to buy a house.

Want to make sure you’re financially prepared to be a homeowner? Here are the costs you’ll need to know about.

Key Takeaways

  • When you buy a home, you should expect to pay certain costs upfront, including fees, your taxes, and your down payment.
  • Once you've closed on the house, you may be required to pay insurance, taxes, private mortgage insurance, or homeowner's association fees in addition to your monthly mortgage payments.
  • You should also be prepared to pay for utilities, home maintenance, and unexpected repairs.

Upfront Costs

When you first buy your home, you’ll face several one-time costs. You also may need to cover several “prepaid” charges, likely placed in an escrow account, to pay for interest, insurance premiums, property taxes, and more that accrue from the date you close on your mortgage until your first monthly mortgage payment.

Here are some other costs you’ll face at the outset of your homebuying journey:

  • Moving costs: This will include the costs of moving supplies, renting a truck, booking movers, and other related expenses. Moving-industry analysis site estimates the average cost of a local, full-service move with no additional services is between $550 and $2,000.
  • Closing costs: These usually are between 2% to 5% of the purchase price.
  • Down payment: Down payments vary by mortgage type. FHA loans require at least 3.5% down, while conventional ones require 3% at minimum.
  • Fees and taxes: These include local real estate taxes and fees charged by the city, county, state, or federal government. Transfer fees (which some states charge when a piece of real estate transfers hands) are a good example.
  • Points: If you opt to pay mortgage, or discount, points to lower your interest rate, you will also pay these upfront.
  • Lender charges: Mortgage companies charge various application, underwriting, and origination fees you’ll need to pay. These vary by lender.

All of these costs, minus the moving costs, should be broken out on your official loan estimate given by your lender. If you have any questions, be sure to ask your loan officer to clarify before sitting down at the closing table.


Your upfront costs can vary greatly, depending on the mortgage lender you choose and how much you shop around. Be sure to compare options from several lenders to ensure that you’re getting the best deal.

Your Mortgage Payment

Once you’re in the home, you’ll start making monthly mortgage payments to your lender. These will include payments toward your principal balance, the interest you’re charged for borrowing the money and, in most cases, your property taxes and homeowner’s insurance premiums as well. (If you don’t have an escrow account, you’ll pay these costs directly to the county and insurance carrier, respectively, rather than through your mortgage payment.) Keeping those factors in mind, you can easily calculate your monthly payments.

Depending on what type of mortgage loan you have, you also may pay for mortgage insurance as part of your monthly costs. Federal Housing Administration (FHA) loans almost always require mortgage insurance, but Veterans Administration (VA) and some conventional loans do not. 

Other Costs To Expect

You’ll also have recurring costs like utilities (e.g., water, electricity, natural gas), sewage, and trash service. If you live in an area with a homeowners association (HOA), you’ll likely have HOA dues regularly, too. 

As a homeowner, you'll also need to foot the bill for regular maintenance tasks, such as:

  • Landscaping and yard work
  • Watering the lawn
  • Cleaning the home, as well as clearing out dryer vents and gutters
  • Maintaining the HVAC system and replacing air filters
  • Pest treatments and prevention
  • Replacing batteries in smoke and carbon monoxide detectors

All in all, annual maintenance costs clock in around $1,100 for the average homeowner, according to Home Advisor. Our experts generally recommend setting aside at least 1% of your home’s value each year to account for these costs. 

Unexpected Costs and Repairs

Despite investing in proper home maintenance, repairs and emergency expenses will most definitely crop up. You might need to replace appliances, repair major systems, fix damage after a storm or natural disaster, or spruce up parts of your home to keep it functioning and current. 

Make sure you study up on the average lifespan of your home’s features and systems, and be ready to replace them when necessary. An air conditioning unit, for example, will usually last 10 to 15 years, while things like dishwashers may need to be replaced sooner.


Getting a home warranty that covers numerous things not normally underwritten by home insurance can help offset the costs of unexpected repairs. In some cases, the seller may be willing to pay for the warranty when you buy the home.

The Bottom Line

The mortgage payment is only a fraction of the costs you’ll face as a new homeowner. Make sure you familiarize yourself with all possible related expenses, and budget carefully before taking that big leap.

Frequently Asked Questions (FAQs)

How much are closing costs for a house?

You should expect to pay 3% to 6% of your home's sales price in closing costs. Closing costs vary, depending on the type of loan, the lender, taxes where you live, and several other factors. For example, in some states, you're required to have a real estate attorney at your closing, so that's another closing cost. You may be able to shop around for some closing costs, like your title search company and title insurance.

How much should you put down on a house?

The amount you should put down depends on your savings, the type of loan, and your overall financial situation. For example, putting 20% down can help lower your monthly mortgage payments, but if it leaves you with no savings to cover emergencies, home maintenance, and moving costs, it may not be the best move. If you put down less than 20% on a conventional mortgage, however, you will have to pay private mortgage insurance, which increases your monthly payment.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. CFPB. "What Are (Discount) Points and Lender Credits and How Do They Work?"

  2. CFPB. "Loan Estimate Explainer."

  3. Home Advisor. "State of Home Spending."

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