How much money do you need to buy a house​ today?

Buying a home is a huge financial step. For many, it’s one of the biggest purchases they’ll ever make. If you’re wondering how much money do you need to buy a house, you’re not completely wrong in being a bit worried. 

It’s definitely more than just the listing price. The truth is, it’s not just about affording the home’s purchase price. Several other expenses sneak up during the process, from closing costs and HOA fees to moving costs, property taxes, and homeowners’ insurance.

Whether you’re a first-time home buyer or looking for your next dream property, this guide will help you understand what it really takes to afford a home, how to start saving for a down payment, and how to estimate your total monthly mortgage payments using a reliable mortgage calculator. So, how much money do you need to buy a house​? Let’s figure it out now. 

The home’s purchase price: Your starting point

Your home’s purchase price is the number that grabs your attention—but it’s just the beginning. If you’re looking at a $300,000 house, that doesn’t mean you only need $300,000 to buy it. It’s the base around which other expenses build.

Remember, the purchase price affects:

• Your loan type (like a conventional loan, FHA, or VA)
• Your down payment
• Monthly mortgage payments
• Interest paid over the life of the loan
• Property taxes and homeowners’ insurance

Earnest money: Good faith money

Home buyers usually submit an earnest money deposit as a show of good faith when their offer on a home is accepted. This deposit, typically around 1% of the agreed-upon purchase price, signals to the seller that you’re serious about the purchase. It’s not an extra cost—think of it as an early payment toward your home. The earnest money is usually paid within a day or two of the offer being accepted, and it’s applied to your down payment or closing costs at the time of closing.

Down payment: How much should you save?

This is the lump sum you pay upfront toward the home’s price. It directly affects your mortgage terms and whether you’ll pay private mortgage insurance (PMI).

Here’s the kind of down payment you can expect based on the type of loan you choose:

• Conventional loan: Requires 3–20% down. Putting down 20% helps you avoid PMI.
• FHA loan: Minimum of 3.5% down. It’s great for buyers with lower credit scores.
• VA loan: No down payment is required for eligible veterans and service members.

Let’s do some math for a $300,000 home:

• 3% down = $9,000
• 10% down = $30,000
• 20% down = $60,000

The best way to figure out your home loan terms and interest rates is by using a mortgage calculator. You can test different down payment scenarios and how they impact your monthly payment and interest paid.

Closing costs: The hidden but necessary expense

Closing costs typically range from 2% to 6% of the purchase price. They include a bundle of fees needed to finalize the sale.

Here’s what you’ll likely pay for:

• Loan origination fees
• Home appraisal fees
• Title insurance
• Real estate attorney fees (if applicable)
• Escrow fees
• Recording and transfer taxes

On a $300,000 home, closing costs can range between $6,000 and $18,000. To see detailed cost breakdowns, ask your mortgage lender for a Loan Estimate form early in the process.

Monthly mortgage payments: Understanding your true costs

Your monthly mortgage payment includes more than just the loan amount (principal and interest). Here’s what it typically covers:

• Principal: What you owe on the loan
• Interest: What you pay the lender to borrow the money
• Property taxes
• Homeowners insurance
• PMI (if down payment <20%)
• HOA fees (if applicable)

A $300,000 loan with 20% down and a 30-year fixed rate of 6.5% would mean:

• Monthly mortgage payment (principal + interest): ~$1,500
• Add ~$300 for taxes + ~$100 for insurance
• Add $150+ if you have HOA fees

Total monthly cost: Could be $1,950–$2,200+

Interest rates: How they shape your loan

Your loan’s interest rate determines how much you’ll pay in the long run. Even a small change can dramatically shift your monthly and lifetime costs.

Here’s how interest rates affect your loan:

$300,000 loan at 6.5% over 30 years = ~$370,000 in interest. At 5.5%, you’d pay ~$313,000—saving $57,000

What affects your rate?

• Credit score
• Loan term (15 vs 30 years)
• Type of loan
• Current market conditions

It is always advisable to shop multiple mortgage lenders and get preapproved to lock in the best rates.

Property taxes and homeowners’ insurance: Local but mandatory expenses

Both are essential parts of your monthly housing cost. Property taxes vary by state and locality. However, the average property tax in the United States is 1.1% of the home’s value annually.

Homeowners’ insurance protects against fires, theft, and natural disasters (in some cases, flood insurance comes at an extra cost).

For a $300,000 home, you can expect the following costs:

• Property taxes: $3,300 annually ($275/month)
• Insurance: $1,200 annually ($100/month)

These are typically escrowed into your mortgage payment.

HOA fees: Watch out for monthly association costs

If you’re buying a condo or home in a planned development, you may have to pay Homeowners Association (HOA) fees. These cover maintenance, landscaping, amenities such as swimming pools and gyms, and sometimes utilities.

Typically, HOA fees range from $50 to $500 per month, depending on services. If you are buying a home in an HOA community, always ask to see the HOA budget and rules before committing. Remember, it affects your monthly expenses and lifestyle.

Moving costs: Don’t forget the move-in costs

This often-overlooked expense adds up fast. Moving expenses vary based on distance, services, and household size.

Typical costs are:

• Local move: $1,000–$2,500
• Long-distance move: $3,000–$8,000

Apart from these costs, you should include a budget for:

• Utility deposits
• Cleaning supplies
• Home setup (curtains, furniture, etc.)

If you’re relocating across the country, costs could skyrocket. That’s why you must always include moving costs in your home-buying budget.

Cash reserves: The safety net lenders like to see

Some lenders may not require it, but having reserves can improve loan approval odds and interest rates. Many mortgage lenders want to see cash reserves—money left over after the down payment and closing costs. This shows you can handle monthly mortgage payments in case of emergencies.

As a thumb rule, you should save 2–6 months‘ worth of mortgage payments. If your mortgage is $2,000/month, aim for $4,000–$12,000 in reserves.

Home repairs, renovations, and upkeep

Once you’re a homeowner, you’re responsible for all maintenance. These aren’t upfront costs, but they’re recurring and critical. You can anticipate annual maintenance of 1%–3% of the home’s value ($3,000–$9,000 on a $300,000 house). You also need to factor in immediate repairs, such as leaky roofs, broken appliances, and plumbing issues. Therefore, it’s a good idea to set aside a home emergency fund to cover these surprises.

How to get ready to buy a home?

Once you’ve figured out the big question—how much money you need to buy a house—the next step is just as important: Are you truly prepared to make the purchase? Here’s how to set yourself up for success before diving into the housing market.

Review your credit score

Your credit score plays a major role in the kind of mortgage and interest rate you’ll qualify for. The higher your score, the better your loan terms are likely to be. You can check your credit score for free through the three major credit bureaus, your bank, or a trusted online service. If your score could use a boost, focus on paying down debt, making payments on time, and correcting any errors on your credit report before applying for a loan.

Set a realistic budget

Understanding what you can truly afford is essential. Go through your income and monthly expenses to create a clear financial picture. A popular guideline is the 28/36 rule—this means spending no more than 28% of your gross monthly income on housing costs, and no more than 36% on all monthly debt combined. This keeps your financial life manageable and sustainable.

Be flexible with your wish list

In today’s competitive market, especially in high-demand areas, finding a home that checks every single box can be tough. Be open to compromise—maybe you give up the finished basement or opt for a smaller yard. Remember, cosmetic features can be added or updated over time, but good bones and a solid location are harder to change.

Start saving for a down payment

You’ll generally need at least 3% of the home’s purchase price for a down payment, but the more you can put down, the better. A larger down payment can lower your loan amount, reduce your monthly mortgage payments, and possibly eliminate the need for private mortgage insurance (PMI). Even small, consistent savings now can make a big difference later.

Get mortgage preapproval

Getting preapproved shows sellers you’re a serious buyer and helps you understand how much home you can truly afford. It involves a lender reviewing your financial documents, credit score, and income. Compare offers from at least three mortgage lenders to find the best rates and terms—it could save you thousands over the life of the loan.

How should you start saving for a down payment?

Here are some tips to start saving money:

• Know your goal. Use a home loan calculator to estimate your ideal price range and down payment requirement.
• Open a dedicated high-yield savings account
• Set automatic monthly transfers
• Cut discretionary spending
• Boost your income through work bonuses, a side hustle, gig work, or tax refunds
• Use down payment assistance programs such as grants and low-interest loans
• Check if your states offer first-time homebuyer savings accounts with tax benefits

How much money do you need to buy a house​ this year? A summary

Buying a home—whether it’s your first house or a vacation property—is a thrilling milestone. But understanding all the costs of homeownership is key to figuring out how much you really need to buy a house. And, ensuring you don’t stretch your budget too thin.

According to the National Association of REALTORS®, the median U.S. home price is approximately $426,900 for a single-family home. But remember that your actual cost will depend on:

• Location (city vs. rural, high-demand areas)
• Home size & type (condo, townhouse, single-family)
• Local market trends (inventory, interest rates, competition)

Assuming a 30-year mortgage with a 7% interest rate, you’d need a minimum annual salary of about $75,000–$85,000 to buy a $300K house, depending on your debts and other expenses.

Bottom line 

There’s no magic number for how much money you need to buy a house, but if you’re serious about buying a home, it’s critical to go beyond just the purchase price. Understand monthly expenses, plan for closing costs, and always use a mortgage calculator to run the numbers.

Whether you’re a seasoned buyer or a first-time home buyer, being financially prepared makes the journey smoother and way less stressful. This guide will help you prepare effectively in your quest for that perfect home.​

Written by Ramona Sinha. April 26, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.