How much does it cost to buy a house?

Buying a house means paying far more than the listing price suggests. Between your down payment, closing costs, monthly mortgage payments, property taxes, insurance, and maintenance, the true cost can catch first-time buyers off guard.

This breakdown covers every expense you'll face — from one-time fees at closing to ongoing monthly costs — so you can budget accurately and avoid surprises along the way.

Upfront home purchase fees

Buying a house costs more than the price tag on the listing. You'll pay the home's sale price plus upfront expenses like your down payment and closing costs. The median existing-home price was around $414,000 in April 2025, according to the National Association of Realtors, though prices swing widely by region — from $313,300 in the Midwest to $628,500 in the West. Beyond the purchase price, you'll face one-time fees that typically total 2% to 5% of the loan amount, plus your down payment, which ranges from 0% to 20% depending on your loan type.

Earnest money deposit

When you make an offer on a home, you'll put down earnest money to show the seller you're serious. This good-faith deposit typically runs $1,000 to $5,000, though the amount varies based on local customs and the home's price. The earnest money sits in an escrow account — a neutral third party holds the funds — and applies toward your down payment or closing costs at settlement. It's not an extra expense, just an advance on money you'd pay anyway.

Home inspection and appraisal

A home inspection costs $300 to $500 on average and reveals the property's condition before you commit. While not always required, an inspection can uncover issues that might change your decision or give you room to negotiate repairs. An appraisal, which your lender requires to verify the home's market value, typically costs $300 to $600. Both protect your investment by confirming you're paying a fair price for a sound property.

Title search and settlement

Title insurance protects your ownership rights if legal issues arise with the property's title after you buy. You'll pay for both a lender's policy, which your mortgage company requires, and an owner's policy, which protects you. Together, title insurance typically costs 0.5% to 1% of the purchase price. The title search itself — where a company reviews property records to verify clear ownership — usually costs $200 to $400. Settlement or attorney fees for preparing and reviewing documents add another $500 to $1,500, depending on your location and the transaction's complexity.

Closing costs and charges when buying a house

Closing costs are fees you pay to finalize your mortgage and transfer ownership of the property. The expenses typically range from 2% to 5% of your loan amount and vary based on your location, loan type, and lender. On a $350,000 loan, you might pay between $7,000 and $17,500 in closing costs.

Loan origination and underwriting

Your lender charges an origination fee for processing your mortgage application, typically 0.5% to 1% of the loan amount. Underwriting fees cover the cost of verifying your financial information, reviewing your credit history, and confirming your ability to repay the loan. Some lenders bundle the charges into a single line item, while others itemize them separately on your closing disclosure.

Discount points and prepaid interest

Discount points let you pay upfront to reduce your mortgage interest rate. Each point costs 1% of your loan amount and typically lowers your rate by about 0.25%. Whether buying points makes sense depends on how long you plan to stay in the home. You'll also pay prepaid interest covering the period from your closing date to your first mortgage payment, which can span a few days to a full month depending on when you close.

Government and recording fees

County recording fees cover the cost of filing your deed and mortgage with local government offices, typically $100 to $250. Transfer taxes — charged by state, county, or city governments — vary widely by location and can add hundreds or even thousands of dollars to your closing costs. Some areas charge 1% or more of the purchase price, while others have minimal transfer fees.

Down payment requirements and funding options

Your down payment represents your initial ownership stake in the home. A larger down payment reduces the amount you borrow, which means lower monthly payments and less interest paid over the life of the loan. However, you don't always need the traditional 20% down.

Conventional loan minimums

Conventional loans backed by Fannie Mae or Freddie Mac typically require 3% to 5% down for qualified buyers. First-time homebuyers can access 3% down payment programs, while repeat buyers usually need at least 5%. You'll pay private mortgage insurance, or PMI, if you put down less than 20%, which according to Freddie Mac data costs an extra $30 to $70 per month for every $100,000 borrowed.

FHA, VA, and USDA paths

Government-backed loans provide alternatives for buyers with lower down payment capacity: FHA loans — Require as little as 3.5% down and accept lower credit scores VA loans — Available to eligible service members and veterans, often with no down payment USDA loans — Offer zero-down financing for homes in qualifying rural areas, though income limits apply

Gift funds and assistance programs

Many loan programs allow you to use gift money from family members toward your down payment, though lenders require documentation proving the funds are a gift, not a loan. According to NAR, 25% used loans or gifts from friends and family for down payments in 2024.

Ongoing expenses in buying a house

Monthly costs continue well beyond your closing date. The recurring expenses include your mortgage payment, property taxes, insurance premiums, and maintenance — all of which can increase over time.

Mortgage principal and interest

Your monthly mortgage payment includes principal, which reduces your loan balance and builds equity, and interest, which compensates your lender for the loan. Early in your mortgage, most of each payment goes toward interest. Over time, the balance shifts and more goes toward principal through a process called amortization.

Property taxes

Local governments assess property taxes based on your home's value and use the revenue to fund schools, roads, and public services. The national median property tax rate is 0.77% of property value annually, though rates vary significantly by state — from 0.32% in Hawaii to 1.83% in Illinois. Most lenders collect property taxes monthly through an escrow account and pay the bill on your behalf when it comes due.

Homeowners insurance

Lenders require homeowners insurance to protect against damage, theft, and liability claims. The average annual cost is $2,110 nationally, though your premium depends on your home's value, location, coverage level, and local risk factors. If you live in a flood zone, you'll need separate flood insurance, which standard policies don't cover.

Monthly mortgage payment breakdown

Your monthly payment divides between different components, and the proportion allocated to each category shifts over the life of your loan. In the early years, interest consumes the largest share, but principal gradually takes over as you pay down the balance.

Principal portion

The principal portion of your payment reduces your outstanding loan balance and increases your ownership stake in the property. Each payment builds equity — the difference between your home's value and what you owe.

Interest portion

Interest represents the cost of borrowing money, calculated as a percentage of your remaining loan balance. Because your balance is highest at the start, early payments include substantial interest charges. As you pay down the principal, less interest accrues each month, allowing more of your payment to reduce the balance.

Escrow for taxes and insurance

Many lenders collect funds monthly to cover property taxes and homeowners insurance, holding them in an escrow account until the bills come due. If your property taxes or insurance premiums increase, your lender adjusts your monthly escrow payment accordingly — which means your total housing payment can rise even with a fixed-rate mortgage.

Property taxes, insurance, and HOA fees

Additional monthly costs vary significantly based on your location and the type of property you buy.

County and city tax rates

Local governments set property tax rates based on community needs and services provided. Urban areas often have higher rates than rural locations. Some municipalities reassess property values annually, while others do so less frequently — but when your home's assessed value increases, your tax bill typically rises too.

Hazard and flood coverage

Standard homeowners insurance covers hazards like fire, theft, and wind damage, but flood damage requires separate coverage. If your home sits in a FEMA-designated high-risk flood zone and you have a federally backed mortgage, flood insurance is mandatory.

Condo and HOA assessments

Homeowners associations charge monthly or annual fees to maintain common areas, provide amenities, and cover shared expenses. The national average HOA fee is $243 per month. HOAs can also levy special assessments for major repairs or improvements, creating unexpected expenses.

Common services covered by HOA fees: Landscaping and exterior maintenance — Lawn care, snow removal, and building repairs Community amenities — Pools, fitness centers, and clubhouses Utilities and insurance — Water, trash collection, and master insurance policies

Hidden costs related to buying a house

Several often-overlooked costs catch new homeowners by surprise. Planning for the items prevents financial strain after closing.

Utility setup and transfers

Connecting electricity, gas, water, internet, and cable to your new home often requires activation fees and deposits. Utility companies may charge $50 to $200 per service for setup, with higher deposits if you have limited credit history.

Initial maintenance and repairs

Even well-maintained homes need immediate attention after you move in. Safety updates like changing locks, installing smoke detectors, or addressing code violations often take priority.

Furniture and appliance upgrades

Moving into a larger space often means buying additional furniture to fill empty rooms. Window treatments provide privacy and energy efficiency but can cost hundreds per window for quality options.

Cost breakdown example for a $400,000 home

For a $400,000 home with a 10% down payment, here's how the costs break down.

Upfront outlay snapshot

Your down payment of $40,000 forms the largest upfront expense. Closing costs on the $360,000 loan amount typically range from $7,200 to $18,000. Earnest money of $2,000 to $4,000 gets applied to the costs. Add moving expenses of $1,000 to $3,000, plus immediate home needs. Total cash needed at closing: approximately $50,000 to $65,000.

Monthly carrying cost snapshot

Your mortgage payment on $360,000 runs roughly $2,300 to $2,600 for principal and interest. Property taxes add $250 to $600 monthly, depending on your location. Homeowners insurance costs about $175 per month. PMI adds another $180 to $270 until you reach 20% equity. If applicable, HOA fees contribute $100 to $400 monthly.

Tools and calculators to estimate costs of buying

Online calculators help you project expenses before you start house hunting.

Mortgage and affordability calculators

Mortgage calculators estimate your monthly payment based on loan amount, interest rate, and term length. Affordability calculators work backward from your income and debts to show how much home you can realistically buy. Most lenders use a debt-to-income ratio of 43% or less, meaning your total monthly debts, including your new mortgage, can't exceed 43% of your gross income.

Closing cost estimators

Closing cost calculators provide location-specific estimates based on your home price and loan type. While estimates vary from actual costs, they give you a reasonable target for your closing budget.

Break-even rent versus buy tools

Rent-versus-buy calculators compare the total cost of homeownership against renting over different timeframes. If you plan to stay in an area for less than five years, renting often makes more financial sense than buying.

Ways to reduce fees when buying a home

Strategic choices during your home purchase can save thousands in upfront and ongoing costs.

Seller concessions

In a buyer's market, sellers may agree to pay a portion of your closing costs or make necessary repairs instead of reducing the sale price. Lenders typically allow sellers to contribute up to 3% to 6% of the purchase price toward your closing costs, depending on your loan type and down payment.

Rate buydown versus higher down payment

You face a choice with extra cash: buy discount points to lower your interest rate or increase your down payment. Buying points makes sense if you plan to keep the mortgage long enough to recoup the upfront cost through lower monthly payments. A larger down payment reduces your loan amount, eliminates PMI sooner, and builds equity faster.

Timing your closing date

Scheduling your closing near the end of the month minimizes prepaid interest, since you'll pay daily interest from closing until month-end. Closing on the 25th instead of the 5th can save you hundreds in prepaid interest charges.

Move forward with confidence

From your down payment and closing costs to ongoing expenses like property taxes and maintenance, each component affects your financial picture. Taking time to calculate the costs before you start shopping helps you budget realistically.

Get a cash offer from Opendoor

If you're buying a new home and need to sell your current one first, Opendoor offers a streamlined alternative to traditional listings. You can request a cash offer online, choose your closing date, and skip the uncertainty of showings and negotiations. Get a free, no-obligation cash offer to see how Opendoor can help you move forward with certainty.

FAQs about the cost to buy a house

What happens if my current home has not sold when I find a new one?

You may need bridge financing or a contingent offer, though both options limit your negotiating power and add complexity. Cash offer services like Opendoor eliminate this timing challenge by purchasing your current home quickly with a flexible closing date.

How soon after closing will I face my first mortgage payment?

Your first mortgage payment typically comes due 30 to 45 days after closing. The exact timing depends on your closing date — if you close early in the month, your first payment might be due nearly two months later.

Can I roll closing costs into the loan amount?

Some loan programs let you finance closing costs by increasing your loan amount, though this raises your monthly payment and total interest paid over the loan term. FHA and VA loans allow this approach more readily than conventional loans.

Does buying with a cash offer service reduce my upfront costs?

Cash offer services like Opendoor can eliminate some traditional buying costs like inspection and appraisal fees while providing more predictable pricing and faster closings. However, the main benefit comes when you're also selling — you can unlock your home's equity quickly without the carrying costs and uncertainty of a traditional sale.