Your mortgage payment is just the beginning. Homes need constant maintenance, and the costs catch many owners off guard. Here's how to budget for the reality of homeownership.
The 1% Rule
A widely-used rule of thumb: Budget 1% of your home's value annually for maintenance.
| Home Value | Annual Maintenance Budget | Monthly |
|---|---|---|
| $200,000 | $2,000 | $167 |
| $400,000 | $4,000 | $333 |
| $600,000 | $6,000 | $500 |
When to Budget More
- Older homes (20+ years): 1.5-2%
- Deferred maintenance when purchased: 2-3%
- Harsh climate (extreme heat/cold): Add 0.5%
- Pool, large yard, or special features: Add 0.5%
The Big-Ticket Replacements
These expenses aren't annual—they hit all at once.
Roof
- Cost: $8,000-25,000+
- Lifespan: 20-30 years
- Save: $400-800/year
HVAC System
- Cost: $5,000-15,000
- Lifespan: 15-20 years
- Save: $300-750/year
Water Heater
- Cost: $1,000-3,000
- Lifespan: 10-15 years
- Save: $100-200/year
Appliances
- Cost: $2,000-10,000 to replace all major appliances
- Lifespan: 10-15 years each
- Save: $150-500/year
Exterior Paint/Siding
- Cost: $3,000-15,000
- Lifespan: 10-20 years
- Save: $200-500/year
Creating a Maintenance Fund
Option 1: Monthly Contribution
Set up automatic transfers to a dedicated high-yield savings account.
Formula: (Home value × 1%) ÷ 12 = Monthly contribution
Option 2: Sinking Funds by Category
Separate savings for specific systems based on their age and lifespan:
- Roof fund
- HVAC fund
- Appliance fund
- General repairs fund
Option 3: HELOC as Backup
A Home Equity Line of Credit can cover unexpected repairs if savings fall short. But savings should be the first line of defense.
Annual Maintenance Checklist
Spring
- HVAC service and filter change
- Gutter cleaning
- Exterior inspection for winter damage
- Deck/patio maintenance
- Lawn equipment service
Summer
- Check window and door seals
- Inspect and clean dryer vent
- Power wash exterior
- Pest inspection
Fall
- Gutter cleaning (again)
- Furnace service
- Seal gaps and cracks
- Winterize sprinkler system
- Check smoke/CO detectors
Winter
- Check for ice dams
- Monitor for frozen pipes
- Check attic insulation
- Indoor project time
DIY vs. Professional
Worth Learning DIY
- Changing air filters monthly
- Basic caulking and weatherstripping
- Unclogging drains
- Patching small drywall holes
- Basic painting
- Replacing fixtures
Usually Need Professional
- Electrical work (safety + code)
- Plumbing beyond simple fixes
- Roof repairs
- HVAC repairs
- Structural issues
- Gas appliances
Pro Tip
YouTube and home improvement stores offer free workshops. Learning basic DIY can save thousands over homeownership.
When You're Buying
Before Purchase
- Get a thorough inspection
- Ask about ages of major systems
- Request maintenance records
- Budget for known issues
Calculate True Monthly Cost
Don't just look at mortgage payment:
| Category | Example |
|---|---|
| Principal & Interest | $1,800 |
| Property Taxes | $400 |
| Insurance | $150 |
| PMI (if applicable) | $100 |
| Maintenance Fund | $300 |
| Utilities | $250 |
| True Monthly Cost | $3,000 |
That "affordable" $1,800 mortgage is actually $3,000/month.
Emergency vs. Planned Maintenance
Emergencies (Budget separately)
- Burst pipes
- Sudden HVAC failure in extreme weather
- Roof leaks
- Appliance breakdowns
Tip: Keep $3,000-5,000 accessible specifically for home emergencies, separate from your maintenance fund.
Planned Maintenance (Predictable)
Everything else. You know systems age. Budget accordingly.
The Bottom Line
Homeownership requires ongoing investment beyond your mortgage. Budget 1-2% of home value annually, create dedicated savings for big-ticket replacements, and treat maintenance as a fixed monthly expense—not a surprise.