A mortgage payment is only part of what a house costs. Add property tax, insurance, PMI, HOA dues, maintenance, utilities and the investment return your down payment gives up, and see both the monthly cash you spend and the true cost you never get back.
Last updated:
Home & mortgage
$
%
% / yr
% of price
Typically 2%–5% for buyers
% / yr
Ongoing costs
% / yr
Of home value; U.S. average is about 1%
$/ yr
$/ mo
% / yr
1%–2% of value is a common budget
$/ mo
Electric, gas, water, sewer, trash
Opportunity cost & growth
% / yr
On the down payment and closing costs
% / yr
% / yr
Insurance, HOA and utilities
Enter your values to see the result.
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How to use the True Cost of Homeownership Calculator
Enter the home price, down payment, rate and term of the mortgage, plus closing costs and PMI if you put less than 20% down.
Add the carrying costs: property tax rate, homeowners insurance, HOA dues, a maintenance budget and utilities.
Set the return you could earn on the cash instead, and the expected appreciation and inflation.
Press Calculate true cost to see the monthly cash cost, the true unrecoverable cost and the cost after appreciation.
Scroll the year-by-year table to watch equity grow against the money spent, and download it as CSV.
How the true cost of homeownership is calculated
Monthly cash cost = principal & interest + property tax + insurance + PMI + HOA + maintenance + utilities
True (unrecoverable) cost = cash cost − principal + opportunity cost of the down payment and closing costs
Net cost after appreciation = true cost − expected yearly rise in home value ÷ 12
Mortgage payment = L × r ÷ (1 − (1 + r)−n), where L is the loan, r the monthly rate and n the number of payments
Example with the default inputs ($400,000 home, 20% down, 6.5% for 30 years): the mortgage payment is $2,022.62, and with property tax, insurance, a 1% maintenance budget and utilities the cash cost is $3,222.62 a month. Only about $298 a month of the first year's payments is principal, while giving up a 5% return on the $92,000 paid at closing costs $383 a month, so the true cost is $3,307.89 a month. If the home gains 3% in value ($1,000 a month), the net cost falls to $2,307.89.
Typical homeownership costs beyond the mortgage
Cost
Common range
On a $400,000 home
Property tax
0.3% – 2.2% of value per year (varies by state and county)
$1,200 – $8,800 / yr
Homeowners insurance
Depends heavily on location, age and coverage
Often $1,200 – $3,000+ / yr
Maintenance & repairs
1% – 2% of value per year
$4,000 – $8,000 / yr
PMI (under 20% down)
About 0.3% – 1.5% of the loan per year
$950 – $4,800 / yr on a $320,000 loan
Closing costs (buyer)
2% – 5% of price, once
$8,000 – $20,000
Selling costs
About 6% – 10% of the sale price, once
$24,000 – $40,000
Tips
Keep an emergency fund for big-ticket replacements: a roof, HVAC system or water heater can cost thousands at once.
Ask the seller or utility company for the last 12 months of bills before buying; utilities often rise when moving from an apartment to a house.
Ask your county for the tax rate after a sale: many areas reassess at the purchase price, so the seller's tax bill can understate yours.
Frequently asked questions
What is the true cost of owning a home?
It is everything you pay that you do not get back: mortgage interest, property tax, homeowners insurance, PMI, HOA dues, maintenance, utilities and the return your down payment could have earned if invested. Principal is left out because it turns into equity. Appreciation can offset part of the true cost, but it is never guaranteed.
How much should I budget for home maintenance?
A common rule is 1% to 2% of the home's value every year, for example $4,000 to $8,000 for a $400,000 house. Newer homes usually need less in the first years, while older homes, large lots and homes with aging roofs, furnaces or water heaters need more. Spread over a year, it is often the cost buyers forget.
What is the opportunity cost of a down payment?
It is the return the same money could earn elsewhere. An $80,000 down payment plus $12,000 of closing costs invested at 5% would earn about $4,600 a year, or $383 a month. Owning a home gives up that return in exchange for paying less interest and owning the property, so a fair comparison with renting includes it.
When does PMI go away?
On a conventional loan, lenders must cancel private mortgage insurance automatically once the balance is scheduled to reach 78% of the original home value, and you can ask to remove it at 80%. FHA loans use a different mortgage insurance premium that often lasts for the life of the loan unless you refinance.
Are mortgage interest and property tax deductible?
Only if you itemize deductions on your federal return. With the 2026 standard deduction of $32,200 for married couples, many homeowners do not itemize, so this calculator does not subtract a tax saving. If you do itemize, the after-tax cost of interest and property tax is lower than shown.
Is it cheaper to rent or own?
Compare the true monthly cost of owning (after appreciation, if you expect it) with the rent for a similar home plus renters insurance. Owning tends to win the longer you stay, because closing and selling costs are spread over more years and the loan balance falls. For a full side-by-side comparison, use a rent vs buy calculator.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.