The Hidden Costs of Homeownership Nobody Tells You About

Your mortgage payment is just the beginning. Here are the true costs of homeownership.

Ongoing Monthly Costs

Property Taxes

Property taxes vary widely by location:

• National average: 1.1% of home value
• High-tax states (NJ, IL, TX): 2%+
• Low-tax states (HI, AL): Under 0.5%

Homeowners Insurance

Protects your investment from disasters and liability.

• Average: $1,200-$2,000/year
• Higher in disaster-prone areas
• Consider flood insurance separately

PMI (Private Mortgage Insurance)

Required if down payment is less than 20%.

• Typically 0.5-1% of loan amount annually
• Can be removed at 20% equity

HOA Fees

Common in condos, townhomes, and planned communities.

• Range: $200-$500+/month
• Cover common areas, amenities, sometimes utilities

Maintenance and Repairs

The 1% Rule

Budget 1-2% of your home's value annually for maintenance.

For a $400,000 home:

• Budget: $4,000-$8,000/year
• Monthly: $333-$667

Common Repair Costs

One-Time Buying Costs

Closing Costs

Typically 2-5% of home price:

• Loan origination fees
• Appraisal
• Title insurance
• Attorney fees
• Recording fees

Moving Costs

• Local move: $500-$2,000
• Long-distance: $2,000-$10,000

Initial Furnishing

New homes need:

• Furniture
• Window treatments
• Appliances
• Tools and equipment

Utility Differences

Utilities often cost more than renting:

• Larger space to heat/cool
• You pay for water/trash
• Lawn care costs

The True Cost of Homeownership

Add it all up:

• Mortgage + taxes + insurance + maintenance + utilities

This is why affordability calculators matter. Use our Affordability Calculator to see what you can truly afford.