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The Condo Mania Team

News > How Much can I Afford to Pay for a Scottsdale Condo or Townhome?

Before you start your condo or townhome search, you’ll want to objectively determine how much you can afford to pay each month. The rule of thumb that lenders use is that your monthly payment should only be 28% of your monthly salary.

When calculating your monthly payment, you’ll need to include not only your principal and interest, but also homeowner’s fees, taxes and insurance. Here’s a quick synopsis of what your monthly payment includes:

Principal and Interest: The Principal is the amount of your mortgage payment that actually pays down the loan. It starts out as a smaller amount of your mortgage payment and increases as the loan balance is paid off. Interest is the amount you pay the bank for giving you the loan. In many cases you should be able to deduct your interest payment on your income tax return – a key advantage to home ownership.

Homeowner Association Fees (HOA fees): Every condo and townhome community has a homeowner’s association, which is the governing body that is charged with caring for the common areas of the community. In most condos, that means not only the community pool and community landscaping, but also the outside of the buildings. They’ll paint, repair the roof (check whether the roof is included if you are considering a townhome), re-surface the parking areas, and mow the grass - things that single family homeowners have to pay too!  In return, the community association charges homeowners a fee for these services and potentially for water, sewer and garbage as well. Homeowner’s Association Fees (HOA fees) vary depending upon what is covered and how many people are paying for that coverage, but usually range from $150 - $250 per month.  Highrises are usually more.

Taxes: County taxes are assessed on properties, whether they are homes, townhomes or condominiums. Your lender will often insist on collecting a portion of that tax in your monthly payment, so that the money will be available at the time taxes are due (twice a year). Lenders are very interested in making sure that tax is paid, and will in most cases pay it for you. If taxes are not paid, the property could potentially go into foreclosure.

Insurance: Condominium insurance usually is needed on the interior, contents and liability. Since the HOA fee usually covers the outside of the condominium, condominium insurance is very affordable. If you are looking at a townhome or patio home, check with your agent and examine the HOA documents to find out what is covered by the Homeowners Association and what you will buy insurance for.

Your Monthly Payment

To get an exact monthly payment, have your real estate agent and mortgage professional help you determine what you’ll pay for principal, interest, insurance, taxes and HOA fees. Here is a basic scenario for a buyer with a 20% down payment on a $229,900 Scottsdale condo:

Home price: $229,900
Assumed Down payment: 20%, or $45,980 (there are loans with as low as 3.5% down, however, fees go up for these)
Assumed interest rate: 4.25
Assumed loan: 30 year fixed principal and interest (this is the most conservative loan type)
Principal & Interest payment: $905 per month
Typical HOA: $200 per month
Typical taxes: $170 per month
Insurance: $30 per month
Total Monthly payment: $1305 per month

Our website has the hypothetical Principal and interest payment (your interest rate may vary), hoa fees and taxes for each listing. but when it comes time to get an exact calculation, you’ll want to ask a lender (we can give you some names!) for more specific interest rates. Consult your insurance professional for insurance payment specifics. And contact us to help you start your home buying adventure!

We've also included below some "starter condos" that can help you bring your monthly payment down further.


Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.

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Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.

Last Updated: 2024-02-22 05:13:33