How to Budget for More Than Just the Mortgage Payment

When most buyers think about affordability, they focus on one number: the monthly mortgage payment. But owning a home comes with several other costs that can sneak up on first-time buyers — and strain your budget if you’re not prepared. Here’s how to make sure you’re budgeting for the real cost of homeownership.

1. Property Taxes

Property taxes vary by location and can change over time as home values increase. Your lender may include them in your monthly payment through an escrow account, but you’ll want to know the yearly amount in advance.

2. Homeowners Insurance

Lenders require insurance to protect against risks like fire, theft, or storm damage. Premiums depend on location, home size, and coverage limits. Expect anywhere from $1,000 to $2,000+ per year.

3. Maintenance and Repairs

Even brand-new homes need upkeep. A good rule of thumb is to set aside 1%–2% of your home’s value annually for maintenance. That could mean replacing a roof in 15 years, servicing HVAC systems, or just fixing a leaky faucet.

4. HOA Fees (if applicable)

If you buy in a condo, townhome, or planned community, you may have homeowners association fees. These cover shared amenities, landscaping, and community upkeep — and they can range from modest to several hundred dollars per month.

5. Utilities

Heating, cooling, water, and electricity costs often go up when moving into a larger space compared to renting. Factor in trash, internet, and cable services as well.

6. Furnishings and Appliances

Don’t forget to budget for the fun stuff! New furniture, window coverings, or appliances can add up quickly after moving in.

7. Closing Costs

Even before you get the keys, closing costs (usually 2%–5% of the purchase price) cover lender fees, title insurance, and escrow services. Make sure you’ve saved enough beyond your down payment.

Final Thoughts

Buying a home is more than just managing your mortgage. By planning for taxes, insurance, maintenance, and other ongoing costs, you’ll enjoy homeownership without financial stress. A realistic budget is the best way to protect your investment — and your peace of mind.