What is a Townhouse?

A townhouse is usually a multistory home that shares at least one wall with neighboring properties. Townhomes are usually part of a larger development and will have to follow rules set by a homeowners association (HOA).

Townhouses tend to be significantly more affordable than single-family homes and are typically found in higher-demand urban and suburban areas.

Lower starting prices in popular areas make these single-family attached homes a popular option for potential homebuyers.

Between the second quarter of 2025 and a year prior, townhouses made up 18.3% of all newly built single-family homes. This was the highest amount since they began recording data in 1985.

If you have found and are ready to purchase a townhouse, you can start by completing an online mortgage application today!

The biggest difference between townhomes and apartments is ownership. With apartments, your home tends to be one unit within a building, while the whole building is your living space with a townhome.

If you have a home loan, you will pay monthly for a townhouse, similar to an apartment. But with each monthly payment you make toward your mortgage, instead of paying rent to a landlord, you will gain home equity, which you could tap into for expenses.

Of course, homeownership comes with additional costs that renting doesn’t. Those who choose to buy a home should be prepared for unplanned updates or replacements that could arise.

Homeowners should also expect to set money aside for other payments like property taxes. Due to their typical size, property taxes on townhomes are usually lower than those for single-family homes.

Townhouses and condos have a lot of similarities, making their differences harder to see. Some townhouses are even sold as condos, making it even more difficult to find their differences.

The main way you can tell the two apart is that with a condo, you will just own the inside of your home. Buying a townhome means you will own the inside, outside and land your property sits on. However, both can have homeowners association rules and regulations to follow.

Like owning any other kind of home, there are pros and cons to owning a townhouse.

• Unlike a condo, you own both the interior and exterior of your townhouse.

• Usually a more affordable option than single-family homes in the area.

• Access to amenities and shared spaces in the development.

• A sense of community with other owners.

• Typically located in desirable areas.

• HOA fees you will have to plan into your budget.

• Occasional lack of privacy with neighbors so close.

• You only own the land that your townhouse sits on.

• Rules set by the HOA you will have to follow.

• You are responsible for the upkeep of your home’s interior and exterior.

When looking to get a townhouse, potential buyers should consider location, amenities and resale value.

Location is important as it will determine how much you will need to travel to get to any place that is important to you. Some buyers want to be closer to work, while others look for a home close to entertainment or shopping centers. If you plan to start a family, you will want to check school districts before buying a townhouse.

The complex your townhome is in can come with amenities to attract buyers and offer residents something to boost their living experience there.

Amenities vary from complex to complex. Some of the amenities you could see are pools, workout facilities or outdoor green spaces. These amenities are shared among all owners and residents. Make sure the amenities are ones you’d use or that will improve your experience there.

One of the most important aspects you should consider when buying any home is the resale value or how much your property’s value could increase. You can do this by looking at values of townhomes in your complex over time and comparing them to the price of homes in your area. Find out if the townhome you are looking to buy has been selling at an increased price as well as the direction sale prices of other homes are going.

Location and amenities also will be factors in determining resale value.

You can get a mortgage for a townhouse with a trusted lender by applying online. It is smart to be approved for a loan before finding the townhouse you want to buy. You can do this through a pre-approval.

Pre-approvals will show you your monthly payments, terms of your loan and the loan amount you will qualify for. Pre-approvals are helpful as they let you plan your monthly budget before buying, know the price range you should consider and can give you a competitive edge in a crowded housing market.

With a pre-approval, you can make an offer on a townhouse when you find one instead of waiting for a mortgage afterward and risking that someone else will outbid you.

Be prepared for when you find your dream townhouse by starting your pre-approval application online today.

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.}

_{Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. Rate does not guarantee or assume liability for the accuracy, completeness or timelines of the information. You should conduct additional research before making any mortgage related decisions.}