What Monthly Homeowner Expenses You Should Expect

Buying a home can be overwhelming. You are making the biggest purchase you will probably ever make in your life, spending money on closing costs, lawyers, and moving costs. While you are focused on these costs, you may not be thinking about what monthly expenses for a home you will have.

Review the household expenses list below and calculate how they will affect your budget. Hopefully, it will not scare you out of buying a home but will guide you to the right house for your budget and help you avoid financial strain down the line. Others have done it, and you can too!

Monthly Expenses for a House

Property Taxes

Property taxes are usually the biggest monthly expenses for a house, although this varies by location and the value of the property.

Every state and local government sets its own property tax rates. Some states have low tax rates (ex: Hawaii, Alabama), while others have higher rates (ex: New Jersey, Illinois). On average, property taxes range between 0.3% and 2.5% of the home’s value.

For example, if you purchase a home for $400,000, your annual property tax bill could be between $1,200 and $10,000, depending on your state. Many homeowners pay these taxes monthly as part of their mortgage. In fact, if your down payment is less than 20%, this is required. The lender holds that portion of your mortgage payment in an escrow account and disperses it on your behalf.

Homeowners Insurance

Homeowners insurance is essential to protect your home from fire, storms, theft, and liability risks. Your insurance premium will depend on factors such as the home’s location (due to the hazards your home could be exposed to), the size and age of the home, how much it would cost to rebuild the home, and the deductible and coverage limits you choose.

On average, homeowners’ insurance costs between $1,000 and $3,500 per year ($83 to $292 per month). Homes in states prone to hurricanes, flooding, tornadoes, or wildfires will likely have higher premiums. Be advised that insurance coverage can be difficult to secure in areas such as these. As homeowners in wildfire-prone areas will tell you, your premiums could also rise considerably. Take this into consideration as you are considering locations.

Utilities

Household expenses monthly include utilities, which homeowners must pay separately. While renters may have had some of these covered, new homeowners should add these to their household expenses list:

• Electricity: $100–$250/month
• Heating and cooling: $50–$300/month
• Water and sewer: $30–$100/month
• Trash collection: $20–$50/month
• Internet and cable: $50–$200/month
• Water heater rental if the heater is not owned: $20–$50/month

The total cost of utilities depends on location, home size, and energy efficiency. Sometimes condo costs cover all or some of these household expenses; you can verify this before you buy

Maintenance & Repairs

What are the monthly expenses for owning a home when it comes to maintenance? Here are some ballpark figures:

• Lawn care & landscaping: $50–$200/month
• HVAC system maintenance: $100–$300 per year
• General repairs: Varies, but expect about 1%-3% of your home’s value annually for these household expenses
• Home cleaning: $50–$150/month

In addition to these household expenses, you may also have unexpected repairs such as basement flooding, a leaky roof, or a furnace that stops working, which only ever happens in the middle of the winter on the coldest day of the year (air conditioning failures always happen on the hottest day). A thorough home inspection can prepare you for some of these major expenses, and you can often use them to negotiate a lower price for your house.

Environmental & Pest Control Costs

Bugs, rodents, and environmental hazards can lead to unexpected household expenses:

• Mold remediation: $500–$5,000+ depending on severity
• Termite treatment & inspections: $75–$1,500 per year
• Rodent & pest control: $100–$500 per year
• Flood insurance: $700–$3,000 per year if needed. This may be required for homes in FEMA flood zones.
• Hurricane & earthquake insurance: Additional coverage may be needed in high-risk areas

Final Thoughts About the Monthly Expenses of Owning a Home

In response to the question “What are the monthly expenses of owning a home?” there is no certain answer. However, you can get a good idea from your real estate agent or by doing online research.  Often, the seller will also provide valuable current information.

By planning for these expenses, you will find a home that is within your budget. Setting funds aside every month will also help pay for major repairs down the road.