When you visit a property builder or seller, most of the time, they will tell you the base price of the property. However, there are several other costs to be kept in mind, such as registry costs, property taxes, homeowners’ insurance, interest and processing charges on a home loan, the cost of interior modifications, and so on.

The actual cost of owning a house can vary significantly depending on several factors, including the property’s location, price of the home, financing terms, utilities, maintenance, etc. A breakdown of the primary costs:

1. Mortgage payment: It includes the principal, along with interest, typically paid monthly.

2. Stamp duty and registration amount: Every property has to be registered. Stamp duty varies across states depending on the location, type of property and applicable concessions. These rates can be between 3% to 9% of the property value.

3. Closing costs: When you purchase a house, you may have to incur one-time closing costs, ranging from 2% to 5% of the home’s purchase price. These costs include title insurance, loan origination fee, inspection fee, appraisal, etc.

4. Homeowners’ insurance: The insurance cost depends on the value of your home, the type of insurance cover chosen, and the area you are in.

5. Home improvements or upgrades: You might want to renovate or upgrade certain parts of the home to be purchased, like the kitchen, landscaping, interiors, etc. The cost of these improvements can vary depending on the extent of upgrades you want. For instance, interiors for a 3 BHK apartment may begin from 20 lakh in a metro city.

6. Maintenance and repairs: Every house needs regular maintenance now and then. Maintenance costs are a big part of owning a home. You will need to budget for repairs, plumbing issues, regular inspection, and servicing of a heating, ventilation and air conditioning system, appliance replacements, etc. Many experts suggest keeping aside about 1% of your home’s purchase cost per year for maintenance.

6. Utilities: You will be responsible for paying water, electricity, gas, internet and other utility expenses.

7. Homeowners’ association (HOA) fees: If you live in an area with a homeowners association, you will have to pay a monthly, quarterly or annual HOA fee.

8. Property taxes: They are a percentage of your home’s assessed value, which may vary by location.

Example: Monthly breakdown for a ₹2 crore home

If you’re considering buying a ₹2 crore home anywhere in India, here’s an example of the typical monthly breakdown:

For a home loan amount of ₹1.5 crore (assuming a down payment of ₹50 lakh) with a loan tenure of 20 years and an interest rate of 7.5% per annum. The monthly EMI will be ₹1.2 lakh per month. This is the primary mortgage cost.

Property taxes in the country vary by state and city you are in. For a home of ₹2 crore, assuming an annual tax rate of 0.5% to 1%, the annual property tax could be around ₹1 lakh to ₹2 lakh.

1. For a ₹2 crore house, you can expect to pay an annual home insurance of ₹10,000 to ₹25,000 (depending on provider, coverage, and exclusions). The monthly home insurance will be ₹800 to ₹2,000.

2. Many experts suggest keeping aside about 1% of your home’s purchase cost per year for maintenance. For a ₹2 crore home, this would mean approximately ₹2 lakh per year ( ₹16,500 per month).

3. Depending on your usage of utilities (electricity, water, gas, internet, etc.), your total monthly utility bill will be ₹9,000 to ₹17,500.

4. If applicable, HOA fees could range from ₹5,000 to ₹20,000 per month.

5. Miscellaneous services like cleaning services, security systems, pest control, and any other non-regular costs of owning a home. These costs may range from ₹3,000 to ₹10,000 for cleaning and ₹2,000 to ₹5,000 per month for a security system.

As illustrated in the example above, although the primary mortgage cost is ₹1.2 lakh per month, the additional expenses can be ₹30,000 per month.

Also, the one-time expenses can be an additional 20% of the property value. Since the purchase of a home is a life-altering and emotional decision, kindly factor all costs in their entirety and rest easy thereafter.

Raj Khosla is the founder and managing director of MyMoneyMantra.com.