The Hidden Costs of Homeownership & What You Should Budget For
The Hidden Costs of Homeownership & What You Should Budget For
Buying a home is an exciting milestone, but it’s also one of the biggest financial commitments you’ll ever make. While most buyers budget carefully for the purchase price, down payment and mortgage, many are surprised by the ongoing costs that come with owning a home. To help you avoid budget shock, here’s a breakdown of some common (and often overlooked) expenses that every homeowner should plan for.
Property Taxes: They vary by municipality and are typically paid annually or semi-annually. In Ontario, they’re based on the assessed value of your home and can increase over time. Make sure to check your local rates and factor this into your monthly housing budget.
Home Insurance: All lenders require home insurance, but even beyond that, protecting your property is essential. Premiums vary depending on your location, home size, coverage level and claim history. Be sure to compare policies and set aside enough each year for renewals.
Utilities: Heating, electricity, water and waste services can add up quickly. Older homes in particular may have less energy-efficient systems, leading to higher bills. It’s a good idea to ask the previous owner or your Realtor for average monthly utility costs before buying.
Repairs and Maintenance: From leaky faucets to roof repairs, maintaining your home is an ongoing responsibility. A general rule of thumb is to set aside 1–3% of your home’s value annually for maintenance. Even newer homes need upkeep, and surprise expenses (like a broken furnace) can be costly.
Condo and Maintenance Fees: If you’re buying a condo or a home in a managed community, you may have monthly maintenance or association fees. These can cover amenities, landscaping, snow removal and building repairs, but they can also increase over time.
Appliances and Furniture: Depending on what’s included in your home purchase, you might need to budget for major appliances like a washer, dryer or fridge. And don’t forget the cost of furnishing your new space, from window coverings to patio furniture. The good news is that you don't have to do it all at once! Making a home takes time.
Landscaping and Outdoor Care: Lawn care, gardening tools, snow removal and seasonal maintenance can all add up. Whether you plan to DIY or hire professionals, keep outdoor costs in mind, especially if you’re moving from a condo to a house.
Renovations and Upgrades: Even if your home is move-in ready, you may eventually want to renovate or personalize. Whether it’s updating a bathroom or finishing a basement, plan ahead for future upgrades and save accordingly.
Mortgage Insurance and Legal Fees: First-time buyers may not realize that CMHC mortgage insurance (if your down payment is under 20%) and legal fees are part of closing costs. These are one-time expenses, but they should be included in your initial budget.
What does all this mean?
Owning a home is a rewarding experience, but it comes with responsibilities and costs that go beyond just your monthly mortgage. Planning ahead for these hidden expenses can help you avoid financial stress and truly enjoy your space.
Need help estimating costs or finding a home that fits your budget? I’m here to help. Let’s connect!
Amy Marquis
REALTOR®
289.314.4854
