The costs of homeownership

There are a variety of expenses involved in purchasing and maintaining a home of your own. Click on each item to learn more.

Are you prepared to pay?

Key Points

Down payment

A portion of the sales price paid to the seller by the homebuyer to close the sales transaction. 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

Costs paid by the borrower (and in some cases the seller) in addition to the purchase price of a home. 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. You will receive an estimate of these costs from your lender after you apply for a mortgage.


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

Home repairs & maintenance

The cost of maintaining your home. 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.

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.

Home 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.

On the plus side, your home can increase in value over the years. Click the Next button to learn more.
Getting started Homeownership: Benefits & Realities The costs of homeownership Your home as an investment Are you ready? Scenario: To buy or not to buy?