The costs of buying a house include more than just the mortgage and down payment.

The idea of owning your own home may have you excited and anxious all at the same time. You may have already completed the first step of getting preapproved for a mortgage and feel ready to start house hunting. However, before you make that big purchase, you want to be sure that you can truly afford the house and know all the costs of buying a house. There’s more to budgeting for home ownership than just paying the monthly mortgage payment. You’ll need to evaluate all the costs associated with home ownership to know just how much home you can afford. These home ownership costs can raise your monthly expenses, but they may not at first be obvious when house shopping.

Monthly Mortgage Costs

Monthly payments include more than just the mortgage when you own a home. YCosts of buying a houseCredit: Flickr: James.Thompsonou’ll also need to factor in homeowner’s insurance and property taxes as part of your monthly expenses. Both are payments your bank may include as part of your monthly mortgage payment by establishing an escrow account. In some cases, your loan may also require that you pay a monthly mortgage loan insurance fee.

Depending on the home’s value, these home ownership costs can range from an extra couple hundred dollars a month to over a thousand dollars a month. You can easily calculate these costs before you buy a home to determine if you can afford the monthly payments. Contact your insurance agent for an estimate on homeowner’s insurance. Your real estate agent can tell you what the region’s property tax rate is, which usually is a percentage of the home’s value. Ask your loan broker if you will be required to pay mortgage loan insurance and its estimated cost. Add all of these to your monthly mortgage payment to get the true monthly costs of maintaining a mortgage.

General Maintenance

Every home, whether new or old, will need regular maintenance as the home ages. A fence may fall down, roofs can leak, windows may crack, pipes can burst, and garage doors may stop working. Any of these things can happen without notice and need fixing immediately. When looking for a home to buy, consider if you will have enough money set aside to pay for these expenses as they occur. Keep in mind that older homes and larger homes will generally have more fences, roofs, windows, pipes, and doors to maintain.  


As a renter, you’ll find that some of your utilities may have been covered by your property owner and included as part of your rent. As a homeowner, you will be responsible for all of the home’s utilities yourself. And as with the general maintenance costs, the utilities will be affected by the age and size of the home. Older homes are not usually as energy efficient as newer homes, taking more energy to heat and cool. Larger homes also cost more to heat and cool. You can ask the current owners of any home you consider for an estimate of utility costs to help you budget for that home. 


Take a careful look at the landscaping of the home to get a feel for what regular gardening and yard work will be needed. Often the landscaping looks well maintained and inviting when homes are put on the market, making it look easy to care for. However, that may not be the case. If you are an avid gardener, then a lush yard with many bushes and trees may be perfect for you. But if you have a brown thumb and don’t relish thVinca ground coverCredit: Amazone idea of spending weekends mowing, pruning, and planting to keep your yard looking its best, a large yard with lots of plants is going to cost more in landscaper fees.

If you find that these hidden costs of buying a house, such as utilities, mortgage insurance, and property taxes are stretching your budget too thin, take a break from house hunting. Look over your budget and determine if buying a smaller house would make home ownership feasible. You may even need to wait until you save some more for the down payment and general house related expenses. Buying a home in which you can afford the associated costs, rather than one you can’t maintain, will make home ownership much more enjoyable.