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Costs Of Owning A Home: A Complete Guide

Molly Grace9-Minute Read
UPDATED: October 31, 2023

Homeownership can be a smart long-term money move, in contrast with paying rent every month. Homeowners get to increase their equity each time they make their mortgage payment, slowly growing the wealth they have in their home over time.

However, there are a lot of costs that homeowners are on the hook for that renters never have to worry about. Sometimes, these hidden costs can be significant, unexpected and a serious strain on the budget. 

To avoid sticker shock after buying a house and moving in, it’s important for potential homeowners to understand the true cost of homeownership before they decide if they should buy a house or not.

Let’s take a look at the typical costs of owning a home so that you can enter homeownership financially, mentally and emotionally prepared.

Upfront Costs Of Owning A Home

  • Down payment cost on a median-priced home: $10,000 – $70,000
  • Closing costs on a median-priced home: $10,000 – $21,000

One of the big hurdles to homeownership for many is the amount of cash you’ll need to bring to the table to be able to close on the home. These upfront costs include your down payment and closing costs.

Down payments are often somewhere between 3% – 20% of the home’s price; however, some loan types, such as VA and USDA loans, require no down payment. If you don’t qualify for a 0% down mortgage, you’ll likely need to have at least a few thousand dollars saved up to be able to get into a home.

Closing costs are all the fees and charges you’ll incur throughout the process of closing on your loan and purchasing your home. Closing costs include things like lender fees, taxes, insurance, title search fee, etc.

Closing costs can range from 3% – 6% of the home’s purchase price.

To get a better idea of how much this would all cost, let’s assume you’re buying a new home at the current median sales price: $346,800.

If you put down 3%, you’d need $10,404 in cash just for your down payment. If you put down 20%, which would allow you to avoid mortgage insurance, you’d need $69,360.

Your closing costs could range from between $10,404 – $20,808.

So, even if your costs were on the low end of the spectrum, you’d still need around $21,000 saved up to buy a home.

However, how much you’ll need will depend on the price of your home, so those buying smaller, more affordable homes wouldn’t need to save quite as much.

For example, someone buying a home for $180,000 with a low down payment and minimal closing costs would need around $11,000.

Day-To-Day Costs Of Owning A House

Once you’re in the home, there will be a variety of regular expenses you’ll be responsible for.

Your monthly mortgage payment is an obvious one, but aside from that, what other regular costs can you expect to incur as a homeowner?


  • Average annual utility costs: $4,158

Utilities include all the electricity, fuels and services you require to keep your home humming with life. Renters also typically pay utilities, but with smaller units and certain utilities rolled into their monthly rent, renters may have lower utility costs than homeowners.

According to the U.S. Bureau of Labor Statistics’ most recent Consumer Expenditures Survey (CES), homeowners spent an average of $4,158 on utilities in 2020, or about $350 a month.

However, this cost can vary quite a bit, depending on where you live, the size and features of your house and how much you use each utility. For example, the owner of a small condo might have utility costs similar to that of an apartment dweller.

Cleaning And Housekeeping

  • Average annual housekeeping supplies costs: $837

Keeping your home clean isn’t just a way to make your space feel nicer; it’s also a necessity to keep your home safe from pests and to keep yourself and your family healthy.

The CES found that homeowners spent $837 total on housekeeping supplies in 2020 – a little less than $70 a month. “Housekeeping supplies” includes things like laundry and cleaning supplies, postage and stationery supplies and lawn and garden supplies. Homeowners spent $215 of that on cleaning supplies alone.

Homeowners Association (HOA) Fees

  • Typical monthly HOA fees: $200 – $300 per month

If you live in a community that’s part of a homeowners association (HOA) or condo association, you’ll likely need to pay a monthly fee to that association.

HOA fees help pay for things like the upkeep of common areas, repairing shared buildings, walkways or roads, or shared services like snow removal or lawn care.

HOA fees are often $200 – $300 per month, but the number can vary a lot depending on what your community offers. If you live in a neighborhood with few shared spaces and services, your HOA fees could be much lower than this. If you live in a luxury condo building with a lot of amenities, such as access to a staffed gym or high-end spa, you’ll pay much, much more.

In addition to regular HOA dues, you may at some point be asked to pay a “special assessment.”

Generally, HOAs will try to have some funds set aside for unforeseen expenses – an emergency roof repair, for example. However, if the association doesn’t have the funds to cover costs, they may impose a special assessment, which must be paid in addition to ordinary HOA fees.

If you’re considering moving into a neighborhood or condo with an HOA, be sure to understand all the fees you’ll be required to pay, including regular dues and special assessments.

Property Taxes

  • Average annual property tax bill: $3,370

If you have a mortgage, your property taxes may be included as part of your monthly mortgage payment, allowing your mortgage servicer to hold this money in an escrow account and pay your real estate taxes on your behalf when they’re due.

In 2019, homeowners paid an average of $3,370 in property taxes, according to the CES.


  • Typical homeowners insurance annual premium: $1,000 – $2,000
  • PMI: 0.1% – 2% of the loan amount

This is another cost that will be included in your monthly mortgage payment, and how much you’ll spend will depend on your insurance needs.

If you’re getting a mortgage to purchase your home, you’ll be required to purchase homeowners insurance. Cost varies quite a bit depending on what state you live in, so homeowners can end up spending anywhere from less than $1,000 to close to $2,000 each year. Your servicer will divide up your annual insurance premium cost and spread it out over each of your monthly mortgage payments for the year if you have an escrow account.

If you get a conventional loan and put down less than 20%, you’ll also be required to pay for a mortgage insurance policy. Private mortgage insurance (PMI) on conventional loans typically costs between 0.1% – 2% of the loan amount each year. Once you reach 20% equity in your home, you’ll be able to cancel PMI.

FHA loans also come with their own type of mortgage insurance, which has similar annual costs to PMI. However, FHA mortgage insurance can’t be avoided, no matter how much you put down. Borrowers who put down less than 10% will be required to keep mortgage insurance for the life of the loan.

FHA loans also come with an upfront mortgage insurance premium that must be paid at closing. This upfront premium is equal to 1.75% of the loan amount.

You may additionally opt for extra coverage in the form of mortgage protection insurance (MPI). This type of policy pays off your mortgage when you or your spouse passes away. Of course, the monthly premiums will increase your housing costs. 

Maintenance And Repairs

  • Average annual maintenance and repair costs: $2,913

When you own your home, you’re responsible for every square inch of it. That means that when stuff needs to be fixed, replaced, cleaned, serviced or otherwise requires time and money to be spent on it, that responsibility falls to you.

Home maintenance and repair costs can be one of the biggest surprises and disappointments for new homeowners. After all, in 2019, homeowners spent an average of $2,913 on maintenance and repairs. Contrast this with renters, who spent a grand total of $61 in this same category.

A good rule of thumb is to budget 1% of your home’s value each year for these costs. On a median priced home, that means you should have around $3,500 set aside each year for repairs and other home-related costs.

Here are some common home repairs and maintenance homeowners encounter.

Roof Issues

Having a good, leak-proof roof is crucial. Smaller roof leak repair jobs might cost just a few hundred dollars, or even less if you’re able to (safely) do it yourself.

If you notice there’s an issue with your roof, it’s important to get it fixed ASAP, because small roof problems can very quickly become costly.

Replacing a roof can be very expensive, often costing $5,000 – $10,000.

Water Damage

When water gets inside a house, it can cause serious issues. Whether it was caused by a burst pipe or a flooded basement, water damage can be an expensive problem to solve.

If your home floods, you may end up needing to repair drywall, replace flooring and throw out furniture or other personal belongings that can’t be dried out or repaired. You may also end up requiring professional mold restoration services.

Depending on the source of the water, extensive professional cleaning might be needed as well.

Plumbing Problems

Plumbing issues are fairly common, but luckily the repairs are typically on the lower end of the price spectrum. Handy homeowners may even be able to deal with many of these repairs on their own, such as fixing a leaky faucet or a running toilet.


HVAC stands for heating, ventilation and air conditioning. It’s the system that regulates the environment inside your home, making it warm in the cold months and cool in the hot months.

This system will need regular maintenance performed by a professional; typically, you should have your HVAC system checked twice a year. For a full system inspection, you can expect to pay $200 – $450, according to HomeAdvisor.

Chimney Sweeping

If you have a fireplace, you should get your chimney inspected and, if necessary, cleaned each year to ensure it continues working safely.

This can cost, on average, around $250, according to HomeAdvisor.

Faulty Foundations

Foundation issues can be extremely costly for homeowners. Though small cracks can be cheaper to fix, big repairs can cost upward of $10,000.

Pest Removal

Having pests in your home is no fun. Whether you’re dealing with mice, termites, or bedbugs, when you spot the telltale signs of an infestation, you’ll want to bring in the pros right away.

Costs can run between a couple hundred dollars to a few thousand, depending on the type of critter you’re dealing with.

Renovations And Home Improvement

One of the joys of being a homeowner is making the space truly yours by painting, rearranging, renovating and upgrading as you see fit. However, your ability to personalize your space will be limited by what you can afford, and many home improvement projects can come with big price tags.

On the flip side, renovating your home can be a great investment, as many of these projects can help boost your home’s value.

Price estimates in this section are from HomeAdvisor.


Depending on how extensive your project is, it’s possible to spend quite a bit of money on landscaping.

Planting a few flower beds without any professional help can usually be done fairly affordably, for example, but a complete overhaul requiring professional work can cost tens of thousands of dollars.

Decks And Patios

Adding a deck or patio is a common project for homeowners looking to upgrade their outdoor spaces. These projects can also be fairly costly: $7,700 on average for a deck, $3,400 for a patio.

Upgrading Furniture And Appliances

As a homeowner, you’ll likely need to make big-ticket purchases from time to time to replace some of the items that help you use and enjoy your home. This can include things like refrigerators, couches or washer and dryer sets.

The cost of these items can vary. Budgeting ahead when you notice an appliance is starting to get old, for example, can help you be prepared for these costs as they come up.

Room Remodels

A full kitchen remodel, one of the most common projects for homeowners looking to revamp their space, can cost an average of $25,000.

How much you’ll spend on a remodel will depend on what you’re remodeling. For example, someone installing all new cabinetry and new countertops will likely spend more than someone who’s just repainting the room and updating some of its hardware (such as installing new drawer pulls). Major renovations could affect your home insurance as well, depending on the scope of the project. Make sure to talk to your insurance provider to find out if you need to increase your coverage.

Average Monthly Costs Of Owning A House

To sum up everything we just talked about, here are the average monthly costs (outside of a mortgage payment) of some of the most important items that homeowners typically have to include in their budgets.

Budget Item

Monthly Cost



Cleaning and housekeeping


HOA fees

$200 – $300

Maintenance and repairs


Keep in mind, these are just some of the basics of what homeowners will typically need to budget for. If you plan on doing lots of renovating or know that some of the major components of your home will need to be replaced soon, you’ll need to account for that as well.

What’s Included In Your Monthly Mortgage Payment?

We touched on this a little bit earlier, but your mortgage payment doesn’t just include the actual payment of your mortgage, it also typically includes things like taxes and insurance.

An easy way to remember what makes up your mortgage payment is the acronym PITI: principal, interest, taxes and insurance.

  • Principal: Your principal is the amount of money you borrowed that you now owe to the lender. This portion of your mortgage payment goes toward reducing your loan balance.
  • Interest: This is what the lender charges you for borrowing the loan.
  • Taxes: As we already mentioned, your lender will typically include your taxes as part of your monthly payment and hold this money in an escrow account for you until your property taxes are due.
  • Insurance: Like taxes, insurance you pay on your home will also generally be included as a part of your monthly payment and paid to the insurer out of an escrow account on your behalf.

The Bottom Line: Make Sure You’re Financially Prepared

Homeownership can come with a lot of benefits, but it’s not something you should jump into without considering whether you’re ready.

By planning ahead, taking time to save and ensuring your budget is ready for this big step, you can enter the world of homeownership confident and ready to tackle any challenge that comes your way.

Molly Grace

Molly Grace is a staff writer focusing on mortgages, personal finance and homeownership. She has a B.A. in journalism from Indiana University. You can follow her on Twitter @themollygrace.