Buying a house: The costs

Quick answer: When thinking about buying a house, think about how costs like insurance, taxes, and closing costs fit into your plans. These can increase the costs of home ownership.

Down payment

Down payments usually range from 3% to 20% of the property value. You may be required to have Private Mortgage Insurance (PMI or MI) if your down payment is less than 20%.

Closing costs

These may include the origination fee, discount points, appraisal, credit report, title insurance, attorney’s fees, survey, and prepaid items such as tax and insurance escrow payments. It’s common for these costs to total between 3% and 5% of your total mortgage.


Because houses can have a high price tag, almost everyone borrows some, if not most, of the money they need to buy one. You may need a home loan, or mortgage, from a mortgage lender. If so, you’ll need to pay back the mortgage by making regular payments (usually monthly) over a period of years, with interest.

Repairs and maintenance

The amount will depend on the condition of your home, its exposure to the elements, the care with which you treat it, the number of people who live in it and the type of usage. While not part of the actual purchase process, you’ll need to start setting aside money for this once you own the home.

Property taxes

Taxes typically paid at least once a year to one or more governmental authorities. The amount is based on the market value of your property as determined by the county where the property is located.


Homeowner’s or hazard insurance protects you against financial losses on your property as a result of fire, wind, natural disasters or other hazards.

Warranty protection

A home warranty is a type of insurance that some homeowners purchase to cover repairs to major systems such as plumbing, electrical, and heating systems, as well as installed appliances. This is optional.