Home Buying Costs in the US
A realistic breakdown of every cost involved in buying a house in the United States.
Down Payment
The conventional standard is 20% down to avoid Private Mortgage Insurance (PMI). On a $400,000 house, that is $80,000. However, many programs allow much less: FHA loans require 3.5%, conventional loans can go as low as 3%, and VA/USDA loans offer 0% down for eligible borrowers. Lower down payments mean higher monthly payments and PMI ($50-$200+/month).
Closing Costs (2-5% of purchase price)
- Loan origination fee: 0.5-1% of loan amount ($1,600-$3,200 on $320k loan)
- Appraisal: $300-$600
- Home inspection: $300-$500
- Title insurance: $500-$2,000
- Attorney fees: $500-$1,500 (required in some states)
- Recording fees: $100-$300
- Prepaid taxes and insurance: 2-6 months of property tax + homeowners insurance escrow
Total closing costs on a $400,000 purchase: typically $8,000-$20,000.
Monthly Ongoing Costs
Your mortgage payment is just the start. Budget for:
- Mortgage (P&I): use our mortgage calculator
- Property tax: ~1.1% of home value/year (property tax calculator)
- Homeowners insurance: $1,500-$3,000/year
- PMI (if less than 20% down): $50-$200/month
- HOA (if applicable): $200-$500/month
- Maintenance: budget 1% of home value/year ($4,000 on $400k home)
- Utilities: $200-$400/month
Total Cost Example: $400,000 House
| Cost | Amount |
|---|---|
| Down payment (20%) | $80,000 |
| Closing costs | ~$14,000 |
| Monthly mortgage (6.5%, 30yr) | $2,023 |
| Monthly property tax | ~$367 |
| Monthly insurance | ~$200 |
| Monthly maintenance | ~$333 |
| Total monthly | ~$2,923 |
Frequently Asked Questions
How much do I need to buy a house?
Minimum down payment is 3-3.5% (FHA). On a $400,000 house, that is $12,000-$14,000 plus $10,000-$16,000 in closing costs. Total: $22,000-$30,000 minimum to close.
Who pays closing costs?
Both buyer and seller pay closing costs, but they cover different items. Buyers typically pay 2-5% of the purchase price. Sellers pay agent commissions (5-6%) and their share of transfer taxes.
Is it cheaper to rent or buy?
It depends on your market, how long you plan to stay, interest rates, and local rent prices. Generally, buying becomes cheaper than renting after 5-7 years in most US markets.
Important Disclaimer
The figures provided by this calculator are estimates based on the information you enter and published rates at the time of writing. They do not constitute financial, tax, or legal advice, and we accept no liability for decisions made on the basis of these estimates. Your actual liability may differ depending on your individual circumstances, applicable reliefs, and any changes to rates or legislation. Always consult a qualified professional or check the latest IRS guidance at irs.gov before making financial decisions.