You’ve saved for the down payment, crunched the numbers on your mortgage and finally feel ready to buy a home. But before you celebrate there’s something you need to know: that your mortgage is just the beginning.
From exploding insurance premiums to surprise repair bills, homeownership comes with a slew of extra costs that many first-time buyers don’t see coming. And if you’re not prepared, they can turn your dream home into a headache.
A recent report from Zillow and Thumbtack found that, on top of the average $1,770 monthly mortgage payment, homeowners shell out an additional $1,180 per month for insurance, maintenance, property taxes and utilities.
“People think that once they’re over the hump of making that big purchase, the rest is smooth sailing,” says a financial advisor. “In reality, it’s just the start of the costs.”
Before you sign on the dotted line, here’s how to run the numbers and avoid sticker shock.
Home Insurance
Many buyers don’t even think about insurance until after they’ve committed to a house—and that’s a mistake.
“Get actual quotes for some of the properties you’re looking at so you’re not caught off guard,” advises Eric Tyson, co-author of Home Buying for Dummies.
A rough estimate is that insurance costs about 0.5% of your home’s value per year. But if you’re in a hurricane or wildfire zone, premiums can be three times higher than the national average. And like everything else they’ll keep creeping up over time.
Maintenance
That leaky faucet? The aging water heater? They’re all on you now. Routine maintenance—like appliance repairs, lawn care and HVAC servicing—averages $500 a month, reckons Zillow.
But the big-ticket items—roof replacements, foundation fixes or a busted furnace—can cost thousands and hit you out of nowhere. Damsky recommends setting aside 1% of your home’s value each year for such surprises. And since repair costs rise with inflation, adjust that number every year based on your home’s current market value.
HOA Fees
If you’re buying a condo or a home in a managed community, HOA fees can range from a few hundred dollars a year to thousands a month. And they’re not always set in stone: some have been shooting up faster than inflation.
Worse still are special assessments. If the building needs a new roof or the pool needs repairs, you could get hit with a sudden bill. Before buying check the HOA’s meeting minutes and financial statements to see if any big expenses are looming.
Property Taxes
Property taxes usually run about 1% of your home’s value a year, but they vary wildly by location. And they don’t stay flat: your bill will climb as your home appreciates. Sometimes, increases come in sharp spikes after a reassessment.
Utilities
Switching from an apartment to a house? Get ready for higher utility bills. The average homeowner spends:
- $3,000/year on electricity and gas
- $1,000/year on water
To get a realistic estimate, ask the seller or a neighbor what they pay. Otherwise, you might be in for an ugly surprise when that first bill arrives.
After You Move In
Buying a home can trigger other expenses you didn’t plan for like:
- Higher gas costs from a longer commute
- Pricier auto insurance in your new ZIP code
- Furniture and upgrades (because suddenly that outdated kitchen really bothers you)
And if you’ve drained your savings for the down payment and closing costs, an emergency fund is a must.
“When you buy that house,” Damsky warns, “the next day the furnace might blow, and there you go—you need five, 10 grand.”
Buying a home is exciting, but don’t let hidden costs ruin the experience. Before you commit:
✅ Get real insurance quotes—not just estimates
✅ Budget 1% of your home’s value annually for maintenance
✅ Research HOA fees and upcoming assessments
✅ Ask neighbors about utility costs
✅ Keep a cash cushion for surprises
Because when it comes to homeownership the price tag on the listing is just the opening salvo.
