The True Cost of Owning a Home: What to Budget Beyond the Mortgage

By Ryan Brown, CEO & Broker | Own Luxury Homes®

Own Luxury Homes® Perspective

National Perspective. Local Expertise.

Buying a home is often approached as a monthly-payment calculation. A buyer determines how much they can put down, estimates the mortgage payment, and begins looking at properties within that range.

But the mortgage is only part of the financial commitment.

Property taxes, homeowners insurance, maintenance, utilities, association fees, and unexpected repairs can materially change what it costs to own a particular home. Some expenses are predictable. Others fluctuate with local conditions, the age and condition of the property, and events that may not occur every year.

The difference between qualifying for a mortgage and comfortably owning a property can be significant.

A more useful question is not simply, "Can I afford the payment?" It is, "Can I comfortably afford this property and the responsibilities that come with it?"

The cost of homeownership is more than the mortgage

The Consumer Financial Protection Bureau (CFPB) recommends considering property taxes, homeowners insurance, supplementary insurance, association fees, utilities, maintenance, and repairs when determining how much home a household can afford.

Some of these expenses may be collected with the mortgage payment through an escrow account. Others are paid separately. Either way, they belong in the household's ownership budget.

A useful starting point is to organize expenses into four categories:

Cost category| Examples

Monthly and recurring| Mortgage principal and interest, property taxes, insurance, HOA dues, utilities

Ongoing upkeep| Landscaping, pest control, servicing equipment, routine maintenance

Irregular major expenses| Roof replacement, HVAC systems, plumbing, appliances, exterior repairs

Transaction-related| Inspections, closing expenses, moving, future selling costs

This distinction matters because a household can have a manageable monthly payment and still be unprepared for a major repair or an increase in insurance or property taxes.

What do homeowners actually pay beyond the mortgage?

National estimates can help illustrate the scale of ownership expenses, but they should be interpreted carefully.

A Zillow and Thumbtack analysis published October 22, 2026, estimated that the typical U.S. homeowner spends approximately $16,566 annually, or about $1,380 per month, on three categories beyond the mortgage:

- Maintenance: $11,171 annually

- Property taxes: $3,129 annually

- Homeowners insurance: $2,266 annually

The analysis reported that these three expenses had increased approximately 32% over five years, with homeowners insurance rising 54% during that period.

However, this is not a complete estimate of every homeowner's non-mortgage expenses. It does not represent a universal budget for utilities, association dues, major renovations, mortgage insurance, or every possible property expense. Its maintenance figure is based on a Thumbtack index of maintenance projects, while taxes and insurance were estimated for typical homeowners in the metros studied.

Other studies produce different totals because they include different expense categories and use different methods. For example, a 2026 Clever Real Estate study included utilities and renovation spending in its estimate of non-mortgage costs. Its total should not be added to the Zillow figure or treated as a directly comparable calculation.

The important takeaway is not that every homeowner should expect to spend a specific national amount. It is that the cost of owning a home extends well beyond the principal and interest payment.

1. Property taxes can change after you purchase

Property taxes are one of the most important expenses to investigate before buying.

The amount depends on the property's taxable value, local tax rates, applicable exemptions, assessment rules, and other jurisdiction-specific factors.

A buyer should not assume that the seller's current tax bill will necessarily become the buyer's future tax bill. A change in ownership, reassessment rules, exemptions, or local tax rates may affect the amount.

This is especially important when purchasing a home that has been owned for many years. The seller may have benefited from exemptions or assessment limitations that do not transfer in the same way to a new owner.

Before purchasing, consider:

- The property's current assessed and taxable values.

- The applicable local tax rates.

- Whether the seller has exemptions or assessment limitations.

- Whether a change in ownership could affect the assessment.

- Whether special assessments or additional district charges apply.

- Whether the property's current tax bill reflects the circumstances that will apply to you.

For an accurate estimate, consult the appropriate county or local tax authority. A real estate professional can help identify where to find the relevant information, but tax questions should be confirmed with the taxing authority or a qualified tax professional.

2. Homeowners insurance is property-specific

Insurance is another expense that can differ substantially between two homes, even when their purchase prices are similar.

The premium may depend on:

- Location and exposure to natural hazards.

- Replacement cost rather than simply the purchase price.

- Roof age and condition.

- Construction materials and building characteristics.

- Plumbing, electrical, and heating systems.

- Prior claims history.

- Coverage limits and deductibles.

- Available mitigation features.

A home with an older roof, unusual construction, or greater exposure to certain risks may have a different insurance profile from a newer property nearby.

Flood coverage deserves particular attention. Standard homeowners insurance generally does not cover flood damage. Separate flood insurance may be necessary or advisable depending on the property's location, exposure, lender requirements, and the buyer's risk tolerance.

Condominiums have another layer of complexity. Association fees may include a master insurance policy for shared building areas, but an individual unit owner may still need a separate policy. Buyers should understand what the association's policy covers and what remains their responsibility.

A practical rule: Obtain property-specific insurance quotes before committing to a purchase. Do not rely exclusively on an online estimate or the seller's existing premium.

3. Maintenance and repairs are an ongoing responsibility

Every home requires maintenance. The amount and timing depend on its age, condition, construction, systems, and how well it has been maintained.

Some expenses are routine:

- HVAC servicing.

- Landscaping and lawn care.

- Pest prevention.

- Gutter and drainage maintenance.

- Minor plumbing and electrical repairs.

- Painting and exterior upkeep.

Other expenses are less frequent but can be substantial:

- Roof replacement.

- Heating and cooling equipment.

- Water heaters.

- Windows and exterior doors.

- Plumbing systems.

- Electrical upgrades.

- Driveways, pools, and other property improvements.

Fannie Mae offers a general maintenance budgeting guideline of approximately 1% to 4% of a home's value annually, with the appropriate amount depending in part on the home's age and condition.

For example, on a $350,000 property, that guideline would translate to a savings target of approximately $3,500 to $14,000 per year.

That is a broad planning guideline—not a prediction of what every home will require or a bill that should be expected every year. A newer home may have fewer immediate repair needs, while an older property with aging systems may require a larger reserve.

A better approach is to consider the actual condition and expected remaining life of major components. A recent inspection, available service records, contractor evaluations, and replacement estimates can help make the budget more realistic.

4. Utilities can change the affordability equation

Utilities are easy to overlook because they are often treated as ordinary household bills rather than costs associated with owning a particular property.

However, the size, design, location, and efficiency of a home can have a meaningful effect on ongoing expenses.

Depending on the property, consider:

- Electricity.

- Natural gas or propane.

- Water and sewer.

- Trash and recycling.

- Internet and other services.

- Pool operation and maintenance.

- Irrigation and landscaping water.

- Septic system maintenance, where applicable.

A larger home may require more heating and cooling. A property with a pool, extensive landscaping, multiple HVAC systems, or additional structures may carry expenses that are not reflected in the mortgage payment.

Climate also matters. Heating and cooling demands vary considerably by region, and utility rates differ between service areas.

When possible, ask the seller for recent utility bills. Several months of records can provide a more useful starting point than a generic online estimate.

5. HOA dues and condominium assessments deserve careful review

Association fees can cover services and amenities that individual homeowners would otherwise pay for separately. Depending on the community, those services may include landscaping, common-area maintenance, security, recreational facilities, building insurance, or exterior maintenance.

But association fees are not simply an optional lifestyle expense when membership is mandatory.

Buyers should investigate:

- Current monthly or quarterly dues.

- What the dues actually include.

- Recent fee increases.

- Pending or anticipated special assessments.

- Reserve funding and major planned projects.

- Association financial statements.

- Restrictions that could affect the property's intended use.

- Responsibility for exterior repairs and shared systems.

Condominium buyers should pay particular attention to building finances, insurance, maintenance obligations, and planned capital improvements.

A lower purchase price does not necessarily mean a lower long-term ownership cost if the association has significant expenses or insufficient reserves.

The CFPB notes that association dues are generally paid separately from the mortgage payment. Buyers should therefore include them when calculating the total cost of ownership.

6. Major expenses do not arrive on a convenient schedule

One of the most difficult aspects of homeownership is that major repairs rarely occur in neat monthly installments.

A roof may last for many years and then require a substantial replacement. An HVAC system may operate reliably until it suddenly needs to be replaced. A plumbing problem may appear without warning.

This is why a maintenance budget and an emergency reserve serve different purposes.

A maintenance budget accounts for expected upkeep and planned replacements. An emergency reserve provides financial flexibility when something unexpected happens.

Before purchasing, consider the condition and approximate age of:

- Roof and exterior materials.

- Heating and cooling equipment.

- Water heater.

- Electrical panel and wiring.

- Plumbing and water supply systems.

- Windows and doors.

- Appliances included in the sale.

- Pool equipment or other specialized systems.

A home inspection can identify visible concerns, but it does not guarantee that every system will remain problem-free. Additional evaluations may be appropriate when an inspector identifies a concern or when a property has specialized features.

7. The cost of ownership depends on the type of property

Two homes with similar prices can have very different ownership expenses.

The property type and its characteristics can be just as important as its purchase price.

Single-family homes

Owners are generally responsible for the home's exterior, roof, yard, systems, and other components unless an association or separate arrangement provides otherwise.

Condominiums

Association dues may cover some shared maintenance and insurance, but buyers should understand individual responsibilities, building finances, and the possibility of special assessments.

Waterfront properties

Buyers may need to investigate flood exposure, insurance availability, seawalls, docks, shoreline maintenance, drainage, and applicable permits.

Homes with pools

Pool equipment, chemicals, cleaning, water, electricity, and eventual resurfacing or equipment replacement can add to ongoing costs.

Rural and acreage properties

Private wells, septic systems, longer driveways, fencing, outbuildings, access roads, and land maintenance can introduce expenses that are uncommon in more conventional neighborhoods.

New construction

A newer home may have lower immediate maintenance needs, but buyers should still understand warranties, builder obligations, landscaping, drainage, included features, and the costs of maintaining the property after warranty coverage ends.

The point is not that one property type is necessarily more expensive than another. It is that the relevant expenses depend on what you are purchasing.

8. Do not confuse purchase costs with ongoing ownership costs

Some expenses occur when purchasing a home rather than every month after closing.

These may include:

- Inspections and specialized evaluations.

- Appraisal and other transaction expenses.

- Title and settlement charges.

- Moving expenses.

- Initial deposits for utilities or services.

- Furniture, appliances, and immediate improvements.

Selling a property can also involve expenses, including preparation, repairs, transaction costs, and other obligations associated with the sale.

The CFPB emphasizes that buying and selling a home can involve significant fees and expenses. Buyers should consider their expected ownership period and avoid assuming that a purchase can always be reversed without financial consequences.

Tax considerations also deserve careful attention. Some homeowners may qualify for certain deductions, but the rules depend on individual circumstances. The IRS explains that eligibility for deductions involving mortgage interest and real estate taxes depends on applicable tax rules, including whether a taxpayer itemizes deductions. Homeowners should consult a qualified tax professional rather than assume that every ownership expense is deductible.

How to calculate the real cost of owning a particular home

Rather than relying on one national average, build a property-specific budget.

Start with the mortgage estimate, then add the expenses that apply to the actual property.

Expense| How to estimate it

Mortgage principal and interest| Loan estimate or lender calculation

Property taxes| Local tax authority and applicable assessment rules

Homeowners insurance| Written quote for the specific property

Flood or supplemental insurance| Property-specific risk and insurance evaluation

HOA or condominium dues| Current association documents

Utilities| Seller records and local service providers

Routine maintenance| Property condition and maintenance plan

Major replacements| Inspection findings and component age

Emergency savings| Household financial circumstances and risk tolerance

Then separate the budget into three practical figures:

1. Monthly recurring cost: What you expect to pay regularly.

2. Annual ownership reserve: What you set aside for maintenance, repairs, and future replacements.

3. Available emergency funds: What remains accessible if an unexpected expense occurs.

This approach makes it easier to compare two properties with different characteristics.

A home with a slightly higher purchase price might have newer systems, lower association expenses, or a more favorable insurance profile. Another property may have a lower asking price but require immediate improvements or carry higher recurring costs.

The right comparison considers the entire property, not just the purchase price.

Questions to ask before buying

Before making a final decision, consider asking:

- What will the property taxes likely be after the purchase?

- Can I obtain insurance coverage at a reasonable cost?

- Is separate flood or other supplemental coverage appropriate?

- How old are the roof, HVAC system, water heater, and major appliances?

- Are there known repairs or replacements approaching?

- What do the association fees include?

- Are special assessments or major community projects anticipated?

- What are the property's typical utility expenses?

- Are there private systems, amenities, or land features that require additional maintenance?

- Will I still have adequate savings after the down payment and closing expenses?

These questions help turn a general affordability estimate into a more informed property decision.

The bottom line: Buy the property you can comfortably own

A home should be evaluated as more than a purchase price and a monthly mortgage payment.

The true cost of ownership includes the property's taxes, insurance, upkeep, utilities, association obligations, and the financial responsibility of maintaining it over time.

National averages can provide useful context, but they cannot tell you what a specific home will cost to own. That requires looking at the property's location, condition, construction, systems, association obligations, and the buyer's own financial circumstances.

At Own Luxury Homes®, we believe informed real estate decisions begin with understanding the property and the details that make it different.

Whether purchasing a first home, moving to another market, or evaluating a distinctive property, the goal should be the same: understand the full commitment before making the decision.

National Perspective. Local Expertise.

Ryan Brown, CEO & Broker | Own Luxury Homes®

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Frequently Asked Questions

What costs should I include when calculating the cost of owning a home?

Include mortgage principal and interest, property taxes, homeowners insurance, any required supplemental insurance, association dues, utilities, routine maintenance, repairs, and savings for major replacements. Purchase and eventual selling expenses should be considered separately.

How much should I budget for home maintenance each year?

Fannie Mae provides a general guideline of 1% to 4% of a home's value annually for maintenance, repairs, and replacements. The appropriate amount depends on the property's age, condition, systems, and maintenance history. It is a planning guideline, not a guaranteed expense.

Are property taxes included in a mortgage payment?

They may be collected through an escrow account as part of the monthly mortgage payment. However, property taxes are a separate cost of owning the property, and they still must be paid if there is no escrow account.

Does homeowners insurance cover flooding?

Standard homeowners insurance generally does not cover flood damage. Separate flood insurance may be available or required, depending on the property, lender, and circumstances.

Are HOA fees included in the mortgage payment?

Usually not. Association dues are generally paid separately, although some mortgage servicers may accommodate them in an escrow arrangement. Buyers should include these fees in their affordability calculations.

Is a newer home always less expensive to maintain?

Not necessarily. Newer homes may have fewer immediate maintenance needs, but costs still depend on construction quality, materials, equipment, landscaping, climate, and how the property is maintained. Warranties also have specific terms and limitations.

What is the biggest unexpected expense of owning a home?

There is no universal answer. For one homeowner it may be a roof replacement; for another, an insurance increase, major plumbing repair, HVAC replacement, or special assessment. The property's condition and location help determine which risks deserve the most attention.

How can I estimate the total monthly cost of a home before buying?

Start with the lender's projected payment, then obtain property-specific estimates for taxes, insurance, and association dues. Add utilities and a reasonable maintenance reserve based on the property's condition. This produces a more realistic ownership budget than relying on principal and interest alone.

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Sources and Further Reading

- "Consumer Financial Protection Bureau — Figure Out How Much You Want to Spend" (https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/)

- "Consumer Financial Protection Bureau — Financial Considerations of Buying a Home" (https://www.consumerfinance.gov/ask-cfpb/what-are-some-of-the-financial-considerations-of-buying-a-home-en-119/)

- "Consumer Financial Protection Bureau — Shop for Homeowners Insurance" (https://www.consumerfinance.gov/owning-a-home/close/shop-for-homeowners-insurance/)

- "Consumer Financial Protection Bureau — HOA and Condominium Fees" (https://www.consumerfinance.gov/ask-cfpb/are-condoco-op-fees-or-homeowners-association-dues-included-in-my-monthly-mortgage-payment-en-1945/)

- "Fannie Mae — How to Build Your Maintenance and Repair Budget" (https://yourhome.fanniemae.com/own/how-build-your-maintenance-and-repair-budget)

- "Zillow Research — Hidden Costs of Homeownership Top $16.6K a Year as Insurance Climbs (October 22, 2026)" (https://www.zillow.com/research/hidden-costs-of-homeownership-2026/)

- "Clever Real Estate — The True Cost of Owning a Home in 2026" (https://listwithclever.com/research/costs-of-owning-a-home-2026/)

- "Internal Revenue Service — Publication 530: Tax Information for Homeowners" (https://www.irs.gov/publications/p530)

This article is for general educational purposes and is not legal, tax, insurance, lending, engineering, or financial advice. Costs, coverage, tax treatment, and ownership obligations vary by property and jurisdiction. Readers should verify property-specific information with the appropriate local authorities and qualified professionals.