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How much does homeownership really cost?

Before you buy a home, the biggest cost you tend to consider is a mortgage, but what about all of the other expenses that come with homeownership? We asked five experienced property owners to break down the costs. Here’s what you need to know

Just six months ago, I became a homeowner for the first time. While I expected my living expenses to increase I didn’t realize just how much those expenses would rise. Prior to buying, I’d factored in all the necessary costs: mortgage, property taxes, utilities for your home and even a monthly budget for home maintenance. What I didn’t anticipate was the unexpected recurring costs or one-time expenses.

To get a better grasp of monthly homeownership costs, we asked five experienced owners to share their experience. Consider this a real-life account as to what you need to budget for when owning a home — and if you want to set your own budget, use our spreadsheet template that includes benchmark costs (that helps you determine how much each homeowner expense can cost you).

1. Rona Birenbaum, detached homeowner, Toronto

In 2005, Rona Birenbaum bought a mid-town detached house in Toronto, Ont. She had previously purchased and sold two other properties, so she was reasonably confident in what she would want and need this time around. 

What is your monthly household budget?

Birenbaum has paid off her current home that she purchased back in 2005. She keeps a comprehensive budget and her monthly homeownership costs still come to $2,800 without a mortgage – which could be a shock to many future homebuyers. She says that although expensive, her budget includes general home maintenance and upkeep, and is still less costly than if she were renting. The average cost to rent a one-bedroom condo in downtown Toronto is now $2,300, for a two-bedroom, you can expect to pay closer to $2,850.

What is the most expensive monthly cost, aside from your mortgage?

Birenbaum says the most expensive cost for her is the combination of utilities and property taxes. “Everything else is something I can manage down if necessary,” says Birenbaum.

What is the least expensive cost each month?

Birenbaum says her least expensive expense is her entertainment budget. Expenses spent on dining out and attending events don’t play into her monthly costs because she’d rather spend time at home “nesting.” 

Do you have money saved in case of a household emergency?

Birenbaum has money saved for maintenance and emergency costs associated with her home. To build up these savings, Birenbaum sets aside money each month. “Once my retirement and education savings goals are met, I save for everything else,” says Birenbaum. She adds that she won’t take on the cost of renovations and home improvements until she has accumulated sufficient funds to cover the costs. 

What are some everyday expenses that first-time homebuyers should anticipate?

In a laundry list of expenses, Birenbaum says some personal financial costs she’s faced includes life and disability insurance, home insurance, home security and general maintenance (such as snow removal and eavestrough cleaning). “I’m not handy, and I also have back issues,” says Birenbaum — so even the most straightforward repairs require hired help. 

What is one tip you’d love to share with first-time homebuyers?

Prepare a realistic home budget then add a 30% contingency to those costs. Birenbaum also encourages first-time homebuyers to consider how they’d handle their mortgage payment if interest rates were to increase by more than 2%. Birenbaum really sticks to the financial goal of paying no more than 35% of her gross income on housing-related expenses.

2. Lauren Sergy, detached homeowner, Edmonton

In 2010, Sergy purchased a 1976 detached bungalow in Edmonton, Alta. She and her partner were pleased with the cost of their home. They didn’t seem to have any surprise expenses come up, which is always a win. 

What is your monthly household budget?

Aside from her mortgage, Sergy and her partner pay between $600 to $800 each month in household expenses. This total includes utilities and waste collection services with a curbside pick up. In Edmonton, waste collection alone costs homeowners nearly $50.

What is the most expensive monthly cost, aside from your mortgage?

The most expensive monthly cost for Sergy is property taxes.

What is the least expensive cost each month?

The least expensive monthly expense for Sergy is basic maintenance. but this comes with one caveat: as a homeowner, she keeps on top of regular maintenance.  “If done properly and regularly, and maintenance projects don’t pile up, then you avoid a big emergency due to neglect.”

Do you have money saved in case of a household emergency?

Yes. “We maintain a slush fund for household emergencies, and we always budget and save up for renovations before pulling the trigger.”

What are some everyday expenses that first-time homebuyers should anticipate?

The amount of equipment needed to keep their household up and running. Sergy says purchasing essential home and yard maintenance equipment like lawnmowers and caulking for repairs is more common than one might think. Sergy says they’ve also had a few significant expenses, namely roof repair and re-insulation. These were tasks that were completed when she and her partner first moved into the home.  “We’ve also replaced several windows, bought a couple of new appliances, and replaced our kitchen countertops,” says Sergy.

What is one tip you’d love to share with first-time homebuyers?

Set up an emergency home fund aside from a regular maintenance fund. This emergency fund helps prepare for unexpected expenses such as a water heater bursting or appliances breaking. “It’s always a good idea to put a monthly amount into your emergency fund until you reach an amount that you’re comfortable with,” says Sergy. To measure what an appropriate household emergency fund could be, consider the most expensive repair you may need to make and aim for that much coverage.

3. Martin Dasko, condo owner, Toronto

In 2011, Martin Dasko purchased a pre-construction condo in Toronto, Ont. Five years later, in 2016, he received the keys to his home and walked into a brand new unit. 

What is your monthly household budget?

On top of his mortgage, Dasko spends $400 on maintenance (condo) fees each month, $50 on utilities and, of course, a lot of money on other monthly homeownership costs such as internet and entertainment. 

What is the most expensive monthly cost, aside from your mortgage?

“The bills never stop,” says Dasko. “Just when you feel like you’ve caught up, it’s time to pay the mortgage or the maintenance fees again.” He adds that it can feel challenging to catch a break at times.

What is the least expensive cost each month?

Dasko joked that he saves a lot of money by hosting friends at his place because they bring the drinks, and he provides the space. Ultimately, entertaining can be both the least and most costly part of owning property, depending on how you host.

Do you have money saved in case of a household emergency?

Dasko was honest with the fact that he doesn’t save for household emergencies. “Most expenses come out of nowhere, and it can be tough to be prepared.” 

What are some everyday expenses that first-time homebuyers should anticipate?

One expense that Dasko pointed out was the overall cost of consumption. In other words, keeping your home maintained is a constant expense. “You want to buy new things all the time,” says Dasko. “New furniture, new artwork, new everything – the spending never stops.” 

What is one tip you’d love to share with first-time homebuyers?

An unexpected but large cost that comes with owning a home are closing costs and the purchase of furniture and décor items. Once in your new space, you may realize you don’t have nearly as many furnishings as you thought, says Dasko. “Small things like pots and pans or even seasoning for your food can add up quickly,” says Dasko. “You may even have to purchase your own shower rod, so the best thing to do is to over-prepare.”

4. Jake Abramowicz, detached house, Toronto

In 2008, Abramowicz and his partner purchased their detached bungalow in Toronto, Ont. The original date of build on their home was 1958, which meant that the property was already 50 years old. 

What is the most expensive monthly cost, aside from your mortgage?

The unexpected costs that appear out of thin air. To date, he and his wife have spent $49,500 on repairs to keep their household running. The least costly expense was a $6,000 repair to solve a “plumbing disaster,” and the most expensive cost was $20,000 which was spent to build a new back deck, as their previous one had been standing for 50 years.

What is the least expensive cost each month?

“Not having to pay rent,” says Abramowicz. All joking aside, he says the least expensive costs are the once-a-year maintenance expenses, such as snow removal and lawn care.

Do you have money saved in case of a household emergency?

Yes.  

What are some everyday expenses that first-time homebuyers should anticipate?

Ongoing care can be at a high cost. The realization that you may have to pay for a home security system or that you need to pay for snow removal or some kind of yard work, whether done personally or professionally, is good to know. 

What is one tip you’d love to share with first-time homebuyers?

He recommends that any future home buyers consider putting aside at least 2% of the purchase price of their home in an emergency fund each year. Still, despite the surprise costs, Abramowicz says that buying a home was the best decision he and his partner ever made.

5. Brittany B., detached house, Thunder Bay

Brittany and her partner purchased their 1941 detached house in Thunder Bay, Ont., in 2018. As someone who blogs about minimalism and living an intentional life, she had always dreamed of owning a home that fit with her lifestyle. 

What is your monthly household budget?

Aside from their mortgage expense, Brittany and her partner spend between $2,000 to $2,500 each month. The total for home repair or decor fluctuates greatly, but she estimates they spend about $100 to $200 each month.

What is the most expensive monthly cost, aside from your mortgage?

“Everything other than the house itself that you ‘need’ to own as a homeowner to help you upkeep your home and property,” she says. “We needed to buy all kinds of power tools and landscaping equipment when we first purchased our house that we would not have needed if we were still renting.” Brittany admits that those monthly homeownership costs can quickly add up.

What is the least expensive cost each month?

Once you buy a home, you have a lot of time to decide what furniture you’d like to purchase and how you’d like to decorate. “There is a certain peace of mind in knowing that our house is our space, and we can decide if and when we want to change it,” says Brittany. “We’ve been slowing decorating since we bought our house a year and a half ago, and it’s been reassuring knowing that we could take all the time we want to get it right.”

Do you have money saved in case of a household emergency?

Brittany and her partner have an emergency fund of sorts, but it’s not specifically designated for unexpected household expenses. Instead, the fund may be spent on any type of emergency that could pop up, such as a vet bill for their pet.

What are some everyday expenses that first-time homebuyers should anticipate?

Brittany says that the most common monthly homeownership costs that pop up are a home improvement. Before buying, she and her partner had never considered purchasing repair equipment. “We always seem to need another small thing like caulk or pipe insulation or drywall putty,” says Brittany. “The list is literally endless.”

What is one tip you’d love to share with first-time homebuyers?

When it comes to homeownership, you should always give yourself a buffer that leans more towards the higher end. “It will always cost more,” says Brittany. “Especially if you don’t have the tools or the expertise to fix it yourself.”

It’s been six months since we took possession of our home, and every single month there’s a new expense that we could never have predicted. We’ve already had to spend $500 to make a small appliance repair, and we’ve got a renovation fund started for the less-essential fixes that will eventually come up. Still, it’s not always easy to feel financially competent when you first jump into homeownership. 

Monthly homeownership costs aren’t black and white

As for myself? Well, as someone who describes herself as profoundly obsessed with saving money and being prepared, it hasn’t always been easy to feel this way as a new homeowner. By speaking to other homeowners and hearing their own experiences, I realize I’m not alone. The bottom line, though, is to save more than you think you need. Another good tactic is to create a budget for household expenses that takes into account one-time and less-frequent expenses, such as paying your annual property taxes. 

Jumping into homeownership doesn’t have to be overwhelming but it does require good planning and preparation. 

Alyssa Davies
Alyssa Davies

Alyssa is an award-winning personal finance blogger and founder of MixedUpMoney.com. She writes about being a mom, overcoming personal debts, and how to get away with affording your ridiculously expensive latte habit. A new homeowner, Alyssa brings her real-life knowledge of the Canadian real estate market and smart money matters to this growing brand.

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