The True Cost of Homeownership: Ongoing Expenses to Plan For

After covering the one-time costs associated with purchasing a home, such as your down payment, legal fees, and closing costs, it is easy to assume that your primary financial responsibility will be your monthly mortgage payment. In reality, homeownership comes with several ongoing expenses that can significantly impact your monthly and annual budget.

Understanding these costs in advance will help you plan more effectively and avoid surprises. Below are some of the most significant ongoing expenses associated with owning a home in Canada.

Property Taxes

Property taxes are set by individual municipalities and are based on factors such as a home’s assessed value, location, and size. Rates vary widely across the country, but homeowners can generally expect to pay approximately 0.5% to 2.5% of their home’s assessed value annually in property taxes. While property taxes are assessed yearly, many municipalities offer flexible payment options.

Homeowners Insurance

Before approving a mortgage, lenders require proof of homeowners’ insurance. This coverage protects both you and the lender against loss or damage to the property. Homeowners’ insurance is typically paid separately from your mortgage, either on a monthly or annual basis.

Insurance premiums vary depending on several factors, including the age of the home, its location, proximity to water, and features such as heating and plumbing systems. It is also important to note that premiums may increase over time, particularly as replacement costs and risk factors change.

Utilities 

Monthly utility costs include essentials such as electricity, natural gas, water and wastewater, as well as services such as internet and cable. These costs vary by province, municipality, home size, and energy efficiency, and can fluctuate seasonally, particularly during colder winter months.

Landscaping, Lawn Care, and Snow Removal

If your home includes outdoor space, maintaining it is another cost to factor in. Homeowners may choose to handle lawn care and seasonal upkeep themselves, but this often requires an upfront investment in equipment such as lawn mowers, trimmers, sprinklers, and snow removal tools.

Alternatively, hiring professional services for lawn maintenance, fertilization, weed control, and snow removal can cost $150 to $300 or more per month, depending on the scope of services and your location.

General Maintenance and Repairs

Even well-maintained homes require ongoing upkeep. Unexpected repairs, such as appliance issues, plumbing problems, or roof maintenance, are a normal part of homeownership.

A commonly used guideline is to budget approximately 3% to 5%  of the home’s value annually for maintenance and repairs. Older homes or properties with specialized features may require a higher reserve.

Condo Fees or Strata Fees

If you own a condo or a strata property, you will be responsible for monthly fees. These fees are usually calculated based on the size of your unit and are expressed as dollars per square foot and paid on a monthly basis. Larger units typically pay more because the fees cover the maintenance of shared areas, building insurance, and contributions to the reserve fund.

Condo or strata fees vary depending on the building, its amenities, and location. They typically cover maintenance of common areas, building exteriors, shared amenities such as gyms or pools, insurance for shared spaces, and contributions to the building’s reserve fund for major repairs and replacements.

Planning Ahead

Owning a home is a rewarding milestone, but it is important to approach it with a clear understanding of the financial commitment involved. Factoring in these ongoing expenses beyond your mortgage payment will help you make confident, informed decisions and ensure long-term financial comfort.