How to use the home ownership cost calculator
- Enter the home price, down payment, mortgage interest rate and loan term.
- Enter the yearly property tax rate, homeowners insurance, any mortgage insurance and HOA dues, utilities, and a maintenance percent.
- Enter closing costs as a percent of the price and the number of years you expect to stay.
- Read the monthly total, the cash needed at the start, the total cash out over your stay and how much of it paid down the loan.
Formula
Mortgage payment = loan x r x (1 + r)^n / ((1 + r)^n - 1), with r = rate / 12 and n = months
Property tax per month = price x tax rate / 12
Maintenance per month = price x maintenance rate / 12
Cash out = down payment + closing costs + payments + running costs
Interest paid and the balance after your stay come from the month by month loan schedule, with each month of interest rounded to the cent.
A $400,000 home with 20% down
With $80,000 down the loan is $320,000. At 6.5% for 30 years the payment is $2,022.62. Property tax at 1.1% is $366.67 a month, insurance of $1,600 a year is $133.33, maintenance at 1% is $333.33 and utilities are $300. The total is $3,155.95 a month, or $37,871.40 a year.
Over 7 years you would pay $357,099.80 in cash, including $92,000 at the start. Of that, $30,668.25 paid down the loan, leaving a balance of $289,331.75, and $246,431.55 was interest, closing costs and running costs.
Beyond the mortgage payment
The mortgage payment is only part of what a home costs. Property tax, insurance, upkeep and utilities continue after the loan is paid, and in the early years of a loan most of each payment is interest. Seeing every piece in one table makes the true monthly figure much clearer than a lender's payment quote.
The tool splits your total cash out into two groups. Money that reduces the loan balance builds ownership, as long as the home keeps its value. Interest, closing costs and running costs are gone once paid.
Choosing your inputs
Every rate here is yours to set. Property tax rates differ by place, insurance depends on the home and area, and maintenance varies a lot from year to year. The 1% maintenance figure is a budgeting rule of thumb used as an example, and a newer home may need less while an older one may need more.
To check a payment, use the mortgage calculator. To weigh owning against renting, try the rent vs buy calculator, and to check taxes, the property tax calculator. The closing cost calculator can refine that line.
Assumptions and limits
- The loan is a fixed rate loan paid on schedule with level payments.
- Home price changes, selling costs, tax deductions, the return on your down payment and one-off repairs are not modeled.
- Every rate and dollar amount is a number you enter. The defaults are examples.
- The years you stay cannot be longer than the loan term.
Frequently asked questions
What does it really cost to own a home?
Beyond the mortgage payment you pay property tax, insurance, maintenance, utilities and possibly HOA dues and mortgage insurance. Add them to the payment to see the monthly cost, and add closing costs for the cash needed at the start.
How much should I budget for maintenance?
There is no fixed figure. This tool uses a percent of the price per year that you can change, and the 1% default is only an example. Age, size and condition of the home all matter.
Is the money I pay toward the loan lost?
No. Payments that reduce the loan balance build your ownership stake, as long as the home holds its value. Interest and the other costs do not.
Does it include the value of the house going up?
No. Appreciation, selling costs and tax effects are not modeled, so the result is only the cost side of the picture.