How much money do I need to buy a house?

Most people take out a mortgage when they're ready to buy a house. In 2024, 74% of homebuyers financed their home purchase, including 91% of first-time buyers.

Your monthly mortgage adds up to the largest chunk of your homeowning costs, but it's hardly the only one: The "hidden" costs of owning a single-family home in the U.S — including closing costs, insurance, taxes, utilities, maintenance and other fees – averaged more than $21,000 in 2025, according to a Bankrate study.

That's a steep increase from 2020, when those same expenses were only about $14,400.

In fact, more than half of would-be buyers cite these expenses as a "very significant obstacle" to homeownership.

The 7 hidden costs of homebuying

Your down payment is the portion of the home price you provide up front in cash, with the remainder financed by your bank, credit union, fintech company or other lender.

In general, a larger your down payment will get you a better mortgage rate, allow you to pay less interest and make smaller monthly payments.

The average down payment for first-timers in 2024 was only 8%, according to the National Association of Realtors, with repeat buyers averaging 19% down. Certain government-backed and proprietary loans are available with nothing down, but the usual minimum for a conventional mortgage is 3% down.

That's a not-insubstantial amount: If you buy a house for $402,300 the median price for a three-bedroom home in the first quarter of 2025, a 3% down payment would be about $12,070.

If you followed the lead of most first-timers with 8% down, you'd need more than $32,180.

Borrowers struggling with their upfront paymen may be eligible for down-payment assistance, an assortment of grants, loans and discounts offered by lenders, government agencies and other organizations.

Lender fees and closing costs are often mentioned in the same breath, but there's a distinction: Financial institutions charge lenders fees as part the processing of your loan. They can include:

• Application fee: This pays to process your mortgage application (including a credit check). It can run as much as $500.
• Origination fee: Processing and originating the loan typically costs between 0.5% and 1% of the total.
• Underwriting fee: A detailed assessment of the borrower's application and risk profile, underwriting can cost anywhere from $300 to $750.

Closing costs include all the set fees in the buying process, including lender fees and third-party costs like:

• Appraisal fee: Pays for an appraiser to assess the property and ensure it's worth how much your asking the lender for. According to home services site Angi, an appraisal averages about $360, but can hover closer to $750 for FHA, VA and other government-backed mortgages. 
• Inspection fee: This covers the cost of an inspector making sure the property complies with local housing codes, which can run $200 to $500, according to HomeAdvisor.
• Attorney fees: In most closings, both the buyer and seller have legal counsel review contracts and represent their interests. The fee is usually between $150 to $500 an hour or a flat rate of between $500 and $1,500, but it can be significantly more depending on the location and property value.
• Title fees: These cover costs associated with transferring ownership (about 0.1% to 2% of the purchase price) and both title search and insurance to establish that no one else has a claim on the property ($75 to $200).
• Recording fee: The cost of filing a deed change and property transfer with the county can run from $20 to $250, according to Experian.

All told, closing costs can range from 2% to 6% of your home total.

Most are paid when you sign the paperwork and get your keys at closing. Some lenders may waive certain fees and particular costs may be paid by the seller. In addition, borrowers may be eligible for closing cost assistance.

If you have a small down payment, poor credit, a high debt-to-income ratio or are applying for a jumbo loan, your lender may want to see substantial cash reserves before they approve — as much as six or more mortgage payments on tap.

Borrowers with nontraditional income or who are buying a second home or investment property may also have to show evidence of healthy reserves. The money should be in cash or easily liquidated, like deposit accounts, investments, eligible retirement funds and the cash value of a vested life insurance policy.

Private mortgage insurance (PMI) is intended to protect the lender's investment, if you default. On conventional mortgaes, PMI can range from 0.1% to 2% of your loan balance annually until you have 20% home equity.

If you put less than 20% down on an FHA loan, you'll pay mortgage insurance premiums (MIP) instead of PMI: A 1.75% fee upfront at closing and then an annual fee of 0.15% to 0.75%. Unlike PMI, you keep payinh MIP for the duration of the loan, unless you refinance to a conventional loan.

Neither VA nor USDA loans require mortgage insurance; however, they do have one-time fees that are due upon closing on the mortgage.

If you are financing your home purchase, your lender will almost certainly require you to take out . In 2025, the nationwide average for $300,000 in dwelling insurance was about $2,341 a year.

But premiums can vary greatly based on the state and locale, the homes' age, size and value, the presence of security and safety features, the proximity to a fire station, the frequency of natural disasters and the borrower's credit score and history of claims, among many other factors.

Depending on where you live you may also be expected to purchase flood insurance, an earthquake policy or windstorm insurance.

Like homeowners insurance, your property taxes are often rolled in with your mortgage and sent in as part of a lager monthly payment held in an escrow account.

Property taxes vary by state but, nationwide, the effective tax rate on a median-priced home averages about 1.10% of its value annually.

You may also be expected to join the local homeowners association (HOA). HOA fees, which pay for common areas, pool maintenance and building upkeep, average $170 a month, according to the U.S. Census Bureau.

In some wealthier areas, however, they can be more than $1,000 a month.

You've closed on your home, turned in your down payment and signed the deed. Now you just have to move in. According to Move.com, the average cost of a full-service in-state move is $7,600 and, if you're moving states, it's more like $9,140.

Even doing it yourself runs at least $170 for a rental van, plus boxes, tape and all the other supplies. If you drove a U-Haul from one state to another, it's likely to be more than $2,000.

You'll also need funds to turn on the internet and utilities, paint the walls, buy new furniture and make unexpected repairs.

"When you go into a home, you want to make sure your emergency fund is full or maybe even increased," Washington, D.C. financial planner Alicia R. Hudnett Reiss told CNBC Select. "As soon as you move in, be prepared for something to come up."

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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