What First-Time Buyers Often Overlook About the Cost of Owning a Home
When you're buying your first home, it’s easy to focus on the mortgage payment—and maybe property taxes if you're thinking ahead. But there are a lot of other costs that come with owning a home, both monthly and one-time, that don’t show up in your pre-approval but definitely show up later.
Here’s a look at the most common ones buyers tend to overlook.
Property Taxes
Property taxes are something I always cover with buyers early on, but they’re still worth highlighting here.
A good rule of thumb is to budget for about 1% of the home’s value per year. That works out to an estimated monthly cost you can plan for, but keep in mind that tax rates vary by area—some are lower, some are significantly higher. It’s one of those costs that depends heavily on where you're buying and what the local rates are.
Heating and Utilities
Depending on the type of home and how it's heated, this can be a big jump from what you're used to. If you're moving from an apartment where heat was included, this one hits hard.
Whether it’s oil, electric, propane, or natural gas—costs vary by season and efficiency of the home. Add in water, power, and internet, and it’s easy to underestimate the total.
Home Maintenance and Repairs
Even newer homes need upkeep—furnace servicing, roof maintenance, plumbing issues, paint, small fixes, and so on.
Older homes might need more attention and cost you more, especially in the first couple of years.
A good rule of thumb is to set something aside each year for maintenance. It might not come up right away, but eventually, it will.
One-Time Purchases You Didn’t Plan For
This is where first-time buyers are often caught off guard. When you go from a rental or an apartment to a house, you suddenly need things like:
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A lawn mower and trimmer
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A snow shovel (or snow blower)
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Tools
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Window coverings
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A second garbage bin
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A garden hose
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Furniture to fill the extra space
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Paint, light fixtures, shelving, etc.
Some of it you can spread out. Some of it you’ll want pretty much right away.
FAQ
Are these costs included in the mortgage approval?
No. Lenders include property taxes and heat when qualifying you, but things like maintenance, utilities, and one-time purchases are up to you to plan for.
How much should I set aside for maintenance?
A rough rule is 1% of the home’s value per year, but it depends on the age and condition of the home.
Can I roll any of these costs into the mortgage?
Some upgrades or purchases can be added through a Purchase Plus Improvements mortgage—but not everyday items like tools or furniture.
Is it better to buy new to avoid repairs?
New homes have fewer immediate issues, but still come with ongoing costs like property taxes, heating, and maintenance of things like decks, driveways, and appliances.
Final Thoughts
Owning a home is a big step—but it’s not just about the mortgage. The more you plan for the full picture of costs, the more comfortable the transition will be.
[Click here if you want help building a full homeownership budget]