Buying a house can be both exciting and daunting, especially if you’re new to the process. If you’re considering buying your first home, it’s important to understand the cost of buying a house with the help of a home loan. When looking at the total cost of buying your house, you should consider not only the price of the house itself but also all of the expenses associated with getting your mortgage and moving in too. Here’s how it all breaks down!

Down Payment

This is probably one of the biggest hurdles. And there’s no way around it. With most lenders, you’ll need to make at least a 20% down payment on your new property if you want to qualify for a loan. For example, let’s say you want to buy a $200,000 home and you have some cash in your savings account ($10,000). That gives you $190,000 left to cover before applying for that mortgage.

Closing Costs

There are some closing costs associated with obtaining a mortgage, regardless of whether you’re paying cash or financing your home. Closing costs generally include items such as title insurance, appraisal fees, and loan origination fees. These can total to be thousands—but it all depends on where you live.

Maintenance and Upgrades

When you buy a home, you don’t just purchase it; you also agree to maintain it for as long as you live there. This means covering expenses like fixing appliances, repainting walls, and paying property taxes. Upgrades are more expensive projects (new roof, new deck), but they can add value and appeal to your property down the road.

Home Security

Homeowners take great care in securing their homes to prevent break-ins and theft. That’s especially true in high-crime areas, but it’s important for anyone who owns the property—whether it’s new or established—to take these precautions seriously. It may seem like you’re spending money on something that won’t be worthwhile if your home is never burglarized. But even homeowners who live in low-crime areas should consider these necessary steps to protect their investment.

Utilities (Electricity, Gas, Water)

The cost of utilities depends on where you live. In expensive cities, these utility bills can really pile up. You’ll have to factor in your monthly costs for electricity, water, and gas so you can factor those into your monthly mortgage payments. Also, note that some utilities might not be included in your rent or lease agreement—you might want to factor those into your monthly payments as well.


The biggest myth regarding buying a house is that it’s always better to purchase rather than rent. While you could feasibly save money in some areas and end up just breaking even over several years, there are other costs and factors to consider—long-term investments, tax deductions, and risks such as unexpected repair costs—that may make renting more advantageous.