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Buying a home is such an exciting accomplishment and a big milestone in life. If you’re in the middle of the process, you know how time-consuming and expensive (down payment, closing costs), yet rewarding it can feel. So much so that it’s easy to forget that you’ve only just started your homeownership journey.��

Once you officially have the keys, you’re responsible for much more than your monthly mortgage payments. You’ll be responsible for a variety of ongoing costs that you’ll need to budget for, otherwise you might end up house poor. Here’s a breakdown of what these costs include.

Maintenance and repairs

Maintaining and repairing your home is one of the largest expenses you’ll incur as a homeowner. Maintenance refers to home improvements or other updates you make that aren’t related to fixing something. Repairs, on the other hand, take place when you need to fix something that has broken. Both of these tend to come in larger, one-time payments, instead of ongoing monthly bills.��

To ensure you’re saving enough, plan to save 1% to 3% of your home’s value each year, or around $1 per square foot. If you set this amount aside, it should be enough to cover any repairs that arise (like fixing the air conditioning or a plumbing issue).��

→ Read about the most expensive home repairs

Homeowners insurance

Homeowners insurance is another necessary, ongoing expense. It protects your home and belongings from incidents like fire, theft, and hail (among others). It also protects you financially in case you or your guests are injured in your home.��

Typically, mortgage lenders require buyers to get homeowner’s insurance before they’ll approve a loan. This is because they want to be sure that the property that they’re helping fund is protected. In many ways, homeowner’s insurance is very similar to renter’s insurance (which is often required by landlords).��

Location is the largest factor in determining what you’ll pay for homeowner’s insurance, although your premium is also determined by the age of your home, the structure of your home (and its materials), your credit score, your marital status, your claims history, the price of your home, and the amount of coverage you need. The average cost is between $1,000 and $2,000 annually.��

Private mortgage insurance

If you decide to pay less than 20% of your home’s purchase price as a down payment, you’ll also need to pay for private mortgage insurance (PMI). The purpose of PMI is to protect the mortgage lender since they’re covering a higher percentage of your home’s cost upfront.

The monthly cost varies since it’s dependent on the sale price of your home, your income, your interest rate, and your credit score (among other factors). The average PMI rate ranges from 0.5% to 2% of your loan amount.��

The great news is that you won’t pay for PMI forever. You can cancel your PMI once you own at least 20% equity in your home (or once 80% or less of the home’s value is left on your principal balance).

Property tax

Property taxes are paid to your local government each year, in either one or two installments Local governments use this money to maintain public services in your community like schools, streets, and fire departments. While property taxes vary widely by state, they typically fall between 0.5% and 2% of your home’s value.��Fortunately, this expense is a common tax deduction available to homeowners.

Utilities

Regardless of where you lived before, utilities are expenses you’re probably familiar with. Utilities include electricity, gas, water, trash, and internet.

Like other homeownership expenses, the cost of each service is highly dependent on the size of your home, where you live, and the type of systems in your house. (For example, your gas bill will be different if you have a forced air system vs. baseboard heating; whether or not you have to pay for trash services or water will depend on if you live in a city or suburb.)

If you lived in a nearby area before buying your house, you probably have a good idea of how much you can expect to pay each month. In general, American families spend between $2,000 and $6,000 per year on utilities.��

HOA fee

Not all homes will require you to pay an HOA (homeowner’s association) fee, so it’s great to ask about HOA fees and what they include during your house search.��

HOA fees are most common in suburban neighborhoods and condo buildings. They typically cover maintenance and landscaping of any common areas (like the streets inside a neighborhood, the lobby, a pool, a neighborhood clubhouse, etc.), snow removal, trash removal, and security. If you do have an HOA fee, you can expect to pay around $200 each month.

Lawn care and landscaping

Lawn care is part of maintaining your property and it’s something many homeowners choose to outsource. You can hire an individual or landscaping company to regularly maintain your property for anywhere from $25 to over $200 per month.��This typically covers

• Mowing and edging your lawn
• Weed removal
• Trimming trees and bushes
• Leaf removal

‍Since lawn care depends on your particular property (and the time of year), this can easily be customized. For example, you may want to hire a company to mow, edge, and weed your lawn for $100 every month, but ask them to remove leaves for an extra fee in the fall.

In addition to regular lawn care, you may choose to undergo larger landscaping projects, like removing trees, adding a pond, or redesigning your yard. These projects can cost upwards of $1,000 depending on where you live, the size and scope of your property and the project, and who you hire.��

Pest control

Pest control is an umbrella term that refers to the prevention and termination of pests in your home, and it’s an essential part of maintaining your property. Common pests include ants, termites, spiders, cockroaches, and even mice or rats. The type of pests you may encounter largely depends on your location. For example, termites are the most common in warm, humid climates.

Before your home is treated, someone from a pest control company will inspect your property for any pest-related damage. They’ll recommend any necessary treatments or prevention measures, the most common of which is a quarterly prevention treatment (often a chemical spray that goes around the perimeter of your home). You can expect to pay between $500 and $1,000 annually for this service.��

How do you budget for these costs?

It’s important to think through all of the costs associated with homeownership before you even begin your house search. Budgeting in advance will help you keep your search limited to properties you know you can afford.

Create a spreadsheet that includes each of the costs above and total them. This may take some trial and error since many of the costs are percentages of the home’s value. Decide what monthly total is affordable for you and then look at homes that will put you in that range. This way you’ll know what to expect and you can budget appropriately.

Example costs

If you buy a $300,000 home with a mortgage (and don't put 20% down) you might expect these costs:

Once you own a home, some expenses (like utilities and HOA fees) can be set up with recurring payments. That way you don’t need to worry about missing payments or checking in every month. However, for less frequent expenses like property taxes, repairs, and pest control, you may want to consider setting up a separate savings account. That way each month you can contribute toward upcoming home expenses.��

→ Learn more about renting vs. buying with our calculator

Are the costs of homeownership worth it?��

You’re the only one who can decide if, and when, homeownership is right for you. However, as long as you budget appropriately, owning a home is an incredibly rewarding experience. You’ll be able to make updates to the home and have a secure, long-term place to live. Plus, even though there are several costs associated with homeownership, you avoid rising rent prices and other disadvantages that come with being a renter.

→ Learn more about if buying a house is worth it