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Unexpected Costs of Home Ownership

Your mortgage payment is typically the largest monthly financial commitment you’ll have in homeownership, but buying a home involves a lot of other expenses. Here are some you need to consider when budgeting for a home purchase.

Homeowners Association Fees

If you’re purchasing a condo or a home in a planned development, a Homeowner’s Association (HOA) fee is a given—it goes to maintain building exteriors, landscaping, plowing, shared amenities and spaces (like pools and playgrounds), and more. HOA fees can also cover things like community utilities and insurance.


Homeowners must pay property taxes to the town or county where they live. Local governments assess these taxes, which fund things like school districts, libraries, roads, police, and fire departments.

Your tax rate is based on a percentage of your home’s assessed value and varies widely. Most property taxes are paid monthly and can be paid through an escrow account connected to your mortgage payment if your bank offers escrow accounts.


In the excitement of buying a new home, it’s hard to anticipate the cost of maintenance and repairs. The cost for regular maintenance like cleaning, lawn care, or snow removal, can add significant expense each month.

Unexpected repairs can also take a toll on your savings—a new furnace, exterior paint job or replacement windows can drain thousands from your account. Home Advisor reported that more than 30% of homeowners faced an emergency repair during the year, with those repairs costing anywhere from $10 to $1,200+.

The best strategy? Budget annually for unexpected costs so you aren’t taken by surprise (you can even create a separate account just for expenses). A good rule of thumb is to set aside either 1% of the home’s value or $1 per square foot each year. To calculate the cost of typical repairs in your area, a home repair calculator can help you plan.

Other expenses

Monthly required expenses such as utilities and homeowners insurance are another factor to add on top of your monthly mortgage payment.

It’s always a good idea to check with the seller about their average monthly utility bills so there aren’t any surprises. For example, in a cold climate, an older home with less efficient heating systems (such as baseboard heat) can cost far more per month than newer, energy-efficient properties, so you’ll need to plan accordingly.

If you have a mortgage, your lender will also require you to carry homeowner’s insurance to protect your home from catastrophic loss. The cost will vary widely from state to state and house to house, but the national average is roughly $1200 per year.

At Citizens Bank, we’ve been helping local folks buy homes since 1931, and our mortgage experts can help you budget for what you can afford and calculate unexpected monthly expenses so there are no surprises. Ready to look for your dream home? Call one of our mortgage experts to get the application process started.

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