Complete worked case study
One home budget, three decisions
A mortgage payment is only one line in a home budget. These three fictional scenarios use the same tested formulas as the calculator to show how down payment, PMI, HOA dues, taxes, insurance, utilities, maintenance, and buying costs interact.
Calculations and commentary by Kevin Song for Your Home Cost. Last reviewed: .
The questions each scenario answers
Baseline: 20% down on a $400,000 home
What does a complete planning estimate look like beyond principal and interest?
This scenario supplies every calculator field. The amounts are fictional planning inputs, not claims about a typical buyer or location.Comparison: reduce the down payment to 10%
How much upfront cash is preserved, and what happens to the monthly subtotal?
Everything except the down payment and a hypothetical 0.65% lender-quoted PMI rate stays the same as the baseline.Comparison: a lower-priced home with HOA dues
Can a lower sticker price still produce a similar monthly obligation?
This separate fictional property uses a 20% down payment, $350 monthly HOA dues, and its own tax, insurance, utility, and maintenance assumptions.Every input, side by side
Blank inputs are not silently treated as known zero-dollar costs here. Each listed field has a value, including explicit zeroes where a cost does not apply to the scenario.
| Input | 20% down | 10% down | $360K + HOA |
|---|---|---|---|
| Home price | $400,000 | $400,000 | $360,000 |
| Down payment | $80,000 (20%) | $40,000 (10%) | $72,000 (20%) |
| Mortgage rate and term | 6.5% · 30 years | 6.5% · 30 years | 6.5% · 30 years |
| Property-tax rate | 1.2% / year | 1.2% / year | 1.1% / year |
| Home insurance | $1,800 / year | $1,800 / year | $1,600 / year |
| HOA dues | $0 / month | $0 / month | $350 / month |
| PMI rate | 0% / year | 0.65% / year | 0% / year |
| Utilities | $350 / month | $350 / month | $275 / month |
| Maintenance reserve | 1% / year | 1% / year | 0.75% / year |
| Other monthly costs | $50 / month | $50 / month | $50 / month |
| Closing-cost allowance | 3% of price | 3% of price | 3% of price |
| Inspection and other upfront | $3,450 | $3,450 | $3,450 |
Monthly result: the mortgage is not the total
| Monthly cost | 20% down | 10% down | $360K + HOA |
|---|---|---|---|
| Principal & interest | $2,023 | $2,275 | $1,820 |
| Property taxes | $400 | $400 | $330 |
| Home insurance | $150 | $150 | $133 |
| HOA dues | $0 | $0 | $350 |
| Private mortgage insurance (PMI) | $0 | $195 | $0 |
| Utilities | $350 | $350 | $275 |
| Maintenance reserve | $333 | $333 | $225 |
| Other monthly costs | $50 | $50 | $50 |
| Complete monthly estimate | $3,306 | $3,754 | $3,184 |
The baseline principal-and-interest payment is $2,023, but the supplied recurring ownership costs raise the complete monthly estimate to $3,306.
Reducing the down payment to 10% increases both the mortgage balance and the hypothetical PMI charge. It preserves upfront cash, but it does not preserve the monthly budget.
The $360,000 property is $40,000 cheaper, yet its $350 HOA dues absorb much of that price advantage. A lower listing price is not a complete cost comparison.
Upfront result: preserved cash has a monthly tradeoff
| Upfront cost | 20% down | 10% down | $360K + HOA |
|---|---|---|---|
| Down payment | $80,000 | $40,000 | $72,000 |
| Estimated closing costs | $12,000 | $12,000 | $10,800 |
| Home inspection | $450 | $450 | $450 |
| Other one-time costs | $3,000 | $3,000 | $3,000 |
| Complete upfront estimate | $95,450 | $55,450 | $86,250 |
The 10% down scenario reduces the modeled upfront total by $40,000, while increasing the modeled monthly total by $448. That comparison does not decide which option is appropriate; it exposes the cash-flow tradeoff a buyer should take to actual lender quotes.
Follow one scenario through the math
- Starting loan: $400,000 price − $80,000 down payment = $320,000.
- Principal and interest: the standard fixed-rate amortization formula produces $2,023per month at 6.5% for 30 years.
- Property tax: $400,000 × 1.2% ÷ 12 = $400per month.
- Maintenance reserve: $400,000 × 1% ÷ 12 = $333per month. This is planned saving, not a predictable bill.
- Full monthly estimate: all eight recurring lines add to $3,306. The calculator retains cents internally even though this table rounds for readability.
The formulas and rounding rules are documented on the methodology page and run through the same shared calculation function used by the interactive calculator.
Replace the illustration with purchase evidence
- Price and financing: use the signed contract and comparable Loan Estimates issued for the same scenario and date.
- Property tax: check the exact parcel, taxing districts, exemptions, and how a sale may change the assessment.
- Insurance: compare written quotes with matching limits, deductibles, and separate catastrophe coverage.
- HOA and utilities: review the association package and a full year of address-level utility bills so included services are not counted twice.
- Maintenance and upfront work: turn inspection findings into dated repair allowances and keep them separate from an emergency cushion.
What this comparison cannot decide
These scenarios do not determine affordability, qualification, future rates, appreciation, taxes after reassessment, insurance eligibility, resale value, or the best use of a household's cash. They also exclude income taxes, investment returns, and transaction costs at a future sale. A complete-looking example is still only a planning model.
FHA, VA, and USDA financing can also include upfront program fees. The live calculator now flags those exclusions next to its results rather than allowing them to disappear inside a finished-looking total.
Sources used to frame the assumptions
The numerical scenarios are original illustrations. These references support the planning ranges and the document-replacement process; none of them endorses this site or these fictional properties.
- CFPB upfront-cash guidance — Page modified October 1, 2025. Down-payment and closing-cost planning.
- CFPB homebuying budget guidance — Page modified February 18, 2026. Moving, renovations, furnishings, and emergency-cushion planning.
- FHFA mortgage-insurance analysis — 2026 analysis. Illustrative borrower PMI-rate range.
- Fannie Mae maintenance guidance — Guidance verified July 22, 2026. Home-maintenance reserve rule of thumb.
- Freddie Mac upfront-cost guide — Last reviewed June 4, 2025. Home-inspection planning range within Freddie Mac’s upfront-cost guide.