10 common costs of home ownership
You’ve saved up enough for the down payment and are ready to purchase a home! You were smart and even read our blog on the 10 closing costs to make sure you had enough money saved to cover the additional expenses but what happens after you move in? We’ve put together the top costs of actually owning a home that you should be aware of & plan for prior to moving in to ensure the home you are looking at still fits within your budget.
1 Property tax.
Many of the services in your new neighbourhood, such as the parks and recreation facilities to road maintenance and schools, are funded in part by municipal property taxes. Rates vary widely, from region to region and home to home. Annual taxes can top several thousand dollars in urban centers, so some homeowners opt to pay in installments — your lender may provide an option to combine these with your mortgage payments. Find out more on your property taxes here.
2 Energy costs.
If you’re used to keeping the lights on and the thermostat up because utilities are included in your rent, you’ll now have to pay for these costs. Budget to cover monthly gas, electric, or oil bills, which fluctuate with the seasons. Your real estate agent can ask a home’s seller to confirm past costs.
3 Phone, cable, and Internet services.
The costs of being “connected” can easily add up to a couple of hundred dollars a month. Moving into a new home might be a good time to consider whether you need both a land line and a cell phone, for instance, or if you can bundle services for a discount.
4 Home insurance.
Protect your home, its contents, and your property against damage or liability. Prices can vary, depending on your home and neighbourhood, but plan for costs that typically start at a minimum of $500 per year. Keep in mind that a lower cost policy may not offer the comprehensive coverage you may want. You can keep costs down by choosing a higher deductible. Need help finding out if the coverage is right for you? Consult an insurance broker or read The Price is Right…But Is The Coverage.
5 Municipal services.
Some municipalities charge fees for services like water or garbage removal. For example, homeowners in some larger urban centers pay $150 to $235 a year for curbside collection of garbage, recycling, and compost.
6 Fuel or transit costs.
If you’ll be commuting a longer distance to work, consider whether you will face higher fuel or public transit costs or whether you’ll have to pay for parking. As well many studies show that the longer or more stressful your commute to work the more likely you are to have high stress & anxiety levels and decreased happiness or general well being.
7 Monitored security.
If you opt for home protection, monitoring can cost anywhere from $20 to $40 or more per month, depending on the plan.
8 Home maintenance.
Plan to cover all the occasional costs to keep your house in working order. Changing furnace filters, carpet cleaning, clearing your eaves troughs, and touching up interior or exterior paint can all add up. You’ll find it easy to spend $30 or more a month on such home maintenance items and services.
9 Property upkeep.
Consider outdoor areas that may need tending to, such as wooden decks, fences, gardens, and lawns. Even when you do the work yourself, budget at least a few hundred dollars and a few hours of your time seasonally for items like wood sealant, landscaping supplies, and plants. During the winter months you’ll need to shovel and salt your driveway and sidewalk to prevent anyone from slipping or falling (Who needs that lawsuit!)
These are larger, less frequent expenses like replacing the roof, furnace, air-conditioning units, or appliances. Housing experts recommend setting aside 1% to 3% of the value of your house each year – a minimum $1,000 for every $100,000. Even things like your hot water heater can add an additional monthly cost if you rent it rather than own.
While the ongoing costs of owning a home can add up to hundreds of dollars every month, by putting a simple budget together now we can help you avoid any unwanted financial surprises in the future. We want to ensure you can afford the mortgage payment and the upkeep of your home while still living the lifestyle you are used to.