Cost of Owning a Home

While the ongoing cost of owning a home does not affect the purchase of the property itself, it is a good idea to keep these in mind.  When purchasing a home you need to ensure your income will not be stretched too thin to the point where you will need to sell because you can no longer afford to pay the bills. It would be a short lived dream of home ownership were you not be able to afford to keep the home you worked so hard to purchase in the first place.

We want you to “own the door”, not “temporarily own the door”. Better to discover something is too much to handle financially before you buy it, rather than after. Being realistic about the cost of buying a home is, in my personal opinion, an incredibly important objective.

Knowing or having a realistic idea on what the ongoing cost of owning a home are likely to be will go a long way to shaping your buying decisions. For example, owning a pool is a goal for many home owners - but did you know it can cost a few thousand a year to maintain? Same with a big yard - riding lawn mowers are like owning another small car with oil changes and engine repairs.

Where (location) you own your home can have an impact as well. One neighbourhood in a city might have double the property tax as the same house in one of the suburbs. While this may not be the deciding factor in your home buying decision, these factors can contribute to the over-all picture and may tip a tight decision one way or the other. Regardless, knowing these costs will better enable you to budget and manage your financial situation once you Own The Door!

Estimating The Cost of Owning A Home

Here is the main list to get you started on your research:

• Property Taxes - varies greatly on the municipality - best to look it up online or call the municipality. It is also usually included in the listing or you can ask the Real Estate Agent selling the property. Many municipalities will include water and sewer in the property taxes, and if not, include them in the Utilities costs. In many regions, property taxes are now a percentage of the market value of your home - the way politicians get a raise with out having to raise the taxes themselves it would seem. Regardless of the real reason, knowing how the property tax is determined will inform you on when and how to expect increases.
• Mortgage Payments - This can be estimated with any of the online mortgage calculators or a more accurate estimate can be arranged by visiting a Mortgage Broker in advance of making an offer.
• Home Insurance - you will get an annual quote which can be paid in monthly instalments. Visit our page on Buying Home Insurance Before Closing to get more information on this subject.

**  Too soon for this detail? Check out our Can I Afford A House page for more detailed information and to use the Affordability Calculator!

• Utilities - Electricity, gas, heating oil, water, sewer, phone / internet. In some areas there is a separate charge for fire service as well. The Real Estate Agent selling the home should have the utility costs for the previous year or two. If not, best to ask the question before you submit an offer.
• Regular maintenance - Newer homes will have less to repair, and older homes (20 years plus) will have a longer yearly repair list (same as cars). Keep in mind that most systems on a house will need replacing after 15-20 years, such as furnaces, air conditioners, roofs, water tap seals, garage door openers. Houses with pools will cost on average another $1200-2000 per year more than those without. Some properties have their own septic system and water well which will also require yearly upkeep, testing, and end-of-life replacement. This is the main list to start with anyways.
• Condominium Fees or Home Owner Association Fees - These are the monthly contributions owners will need to make to cover annual maintenance and repairs. Often water and sewer costs are included in these as well. This should be identified in the listing, although there may be an impending increase not mentioned.

Home Improvements Costs Of Owning A Home

For us older folks those words are a throw back to previously popular sitcom with Tim Allen. Like that show, there seemed to be a never-ending list of projects that needed to be completed.

Many people buy newer homes because they won't come with as many repairs, and while that is true, they offer up a whole different set of costs. Older homes will have had (usually but not always) improvements like fences, decks and gardens. Newer homes will trade the immediate need for repairs for a longer list of desired improvements, like fences, decks and gardens. You may also need to add things like air conditioning or dishwashers.

Making a careful list of things that you and your partner want to see in a home will give you an ability to compare older and newer homes. Having a long list of things your will need to improve will obviously add to the ongoing cost of owning a home.

** For more information on the lists of renovation projects you might encounter, check out the Home Buying Contingencies page!

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