How a Home Can Cost Over $10,000 a Year (Not Counting the Mortgage)


Some people think buying a home will solve all their problems.

Some people think paying off their home will solve all their problems.

Some people…. still have problems.

No matter what your living situation, if you are interested in FI, you are probably trying to financially improve upon some aspect of your living arrangement.  

In this post, we are running some numbers on what we can control and what we can’t at this point in our housing journey. 

Below is a quick dimensional layout of our two-story home (it is mostly deck)!

Our Backstory

In 2012 we lived in a very affordable apartment that cost us $350 per month.  

We only moved when we came across a very rare foreclosure.  Once this house was completely remodeled and paid off, our monthly housing costs were about the same as in the apartment!  Score!

Of course, we had saved a lot in order to remodel that home and achieve such a reality.

While living in that 1,100 square foot home, we had a list of five to ten houses in town we were willing to move for. To our surprise, one of them happened to come on the market in 2015.  We went for it and finished remodeling it before having children!

We completely changed the layout, sold our old home, and settled…. four blocks away.  We paid off this house in October of 2018.  

While projecting our future expenses and possible FI number, we came across an interesting revelation.  Even with our house paid off, it still costs a lot to live here!

Before diving into details, here is a rundown of the property according to the assessor's website for a little background:

Cost Breakdowns

Below is our cost breakdown.  

We will work on driving these numbers down in the next few years, but there are several things we can’t control (as you will see).

Electricity: $1234  

Before having our child and experiencing last year’s rate hike, we only spent about $650 on electricity per year.  This year we use the washing mashing a lot more because of cloth diapers. In general, having a baby makes us do laundry a lot more!  We also leave more lights on at night and have been more relaxed about our electricity bill while tackling other issues.

Our local energy company has a monopoly on the area and is proposing a 23% increase!  It will be difficult to push this number lower in the future.

Gas: $1160.49  

We currently stay comfortable with the thermostat set at 67 degrees when we are home.  We have it programmed to go down to 63 degrees throughout the day. Once again, we were harsher on this number when we didn’t have a child. Freezing our child just doesn’t seem like the cool trendy thing to do.

Property Tax: $3,946 (up $762 from last year)!

We live in an awesome town with a great school system.  I work at this school, so it’s kind of like paying myself, right?  By comparison, we could live in a local town where the property tax is half this amount, but our day to day experiences are important to us.  

Home Insurance: $685 ($26 of which is optional earthquake coverage)

This is the only bill that went down this year!  I’m not sure if it went down because we paid off the house or our credit score got better.  Keep in mind, our roof is 20 years old and currently not covered on this policy. Also, we were “kicked off” a different policy when they found out how old our roof was.  Given our experiences, shopping around for cheaper insurance doesn’t seem like an option until we have a new roof.

Trash Pickup: $168

This is $14 a month.  There was a time when we didn’t pay it because we were “almost” zero waste and… well, the rest wasn’t pretty and involved a random dumpster.  If we were go-getters, we would tackle this expense and share with a neighbor. However, given the awkwardness of trying to communicate we are trying to save $84 a year, it doesn’t seem worth it until we meet a neighbor with a similar mindset.

Water: $565

We pay this bill on a quarterly basis.  We used to easily keep it below $400 per year in our more frugal years.  A while back there was a rate hike.  I forget exactly how much it was, but we noticed it right away, so I called in for the details at that time.  We haven't started showering less, showering for a shorter amount of time, or doing less laundry.  We also water a lot of plants all year round.  We don't see this behavior changing in our future, although we try to be mindful and not unnecessarily wasteful.

Grand Total: $7,758.49

Final Thoughts

I can hear what some of you are thinking... Move back into a smaller house!!!  

Good point.

However, we love this house because of its amazing view.  Plus, it's in a great neighborhood on a quiet street.

We are sold on the natural beauty inherent in its unique location. As a consequence, we won’t be moving anytime soon.  

I can tell you one thing - we don’t plan to make it bigger.  We do plan to make it nicer, however, and this involves… you guessed it...

Maintenance (2% of property value): $5,000

For most property owners, the act of putting aside 2% of the house's assessed value per year is a good general rule to follow.

Real Grand Total: $7,758.49 + 5,000.00 = $12,758.49

Considering we have a home built in the year 1900, I should probably think of the maintenance number as 3% just to be safe!

Keep in mind, this doesn’t include the cost of planned renovations or the savings we put aside for our new roof next summer.

In conclusion, it was eye-opening for us to look closer at these numbers while celebrating the act of paying off our house.  It all adds up fast!

How about you?  Do you know how much it will cost you to live in your home after the mortgage is gone?  Are there elements you can predict will go up over time (like electricity, heat, and property tax)?

22 Replies to “How a Home Can Cost Over $10,000 a Year (Not Counting the Mortgage)”

    1. Thanks for stopping by the blog Angela! I wish we had a biweekly option! You’ll have to keep convincing that husband of yours. We have recycling bins and a compost outback where I dump vegetable scraps over the fence, so I know we could swing one bag of trash every two weeks if given the chance.

      I’m known to smack an occasional squirrel with compost btw. I don’t know they are there, and when I dump the compost over the fence I hear the strangest commotion!

  1. This is a great reminder of how much having a larger house costs to maintain. This doesn’t even include the costs that will eventually happen, like replacing the roof or the furnace.

    We live in a new build that is 3.5 years old, and I think our electricity + gas costs might be near where yours are at. But this has made me curious to run the numbers to see how much it costs per year.

    Eventually, we want to downgrade when the girls go to college. But I think it is worth the extra cost to be in this neighborhood while our girls are young.

    1. Thanks for your comment Chris. I’ve never lived in a new build! How exciting! You made a great point about the furnace. I didn’t even get to that. I know these details vary by location and circumstance (some people’s property tax alone is $15,000), but we are very middle class and just shocked by how much everything goes up for homeowners and renters alike.

  2. The costs of homeownership definitely don’t disappear even when you are mortgage free! However, no longer having to focus on making a payment to the bank is definitely a plus in my book. We only have our mortgage left and if all aligns, we plan to pay it off in the next five years or so. I estimate it would be about $7K-8k/year in ongoing costs once it’s paid (condo fees, property tax, maintenance and utilities).
    It is not often do I come across other bloggers who are also musicians so I will most certainly have a listen to your music!

    1. Congrats on paying down your mortgage Kassandra! I think your estimate sounds awesome. What you will be paying will most definitely come in lower than what rent would probably be (although I don’t know your area). I find property tax to be the most random and difficult to account for in our area. It seems to fluctuate a lot!

      I’m finding it’s difficult to keep up with both the music and the blog. I wonder if that’s why it’s rare to come across both? I’m going to keep at it though. There’s a lot more to come! I hope you enjoy the music.

  3. I am scared of adding up how much it actually costs to live in our home mortgage free. Some day I’ll work up the courage to do it, but for now I’m happy living oblivious after recently paying off our mortgage. 🙂

    This is a great reminder about all the costs that come with home ownership, especially in larger homes. I’m going to bookmark this whenever we get the itch to upgrade to a bigger house. Great writing, as always!

    1. Thanks for stopping by the site. Congrats on such a big accomplishment! Ride out that high for as long as you can! I’d be curious to hear some numbers from people if you are ever ready… Also, I’m glad I can inspire you to stay in a smaller place.

  4. This is a great reminder that no mortgage doesn’t mean free housing. I haven’t thought about it as deeply and detailed as you have here. I have just calculated our expenses and how those will change when the mortgage is paid off.

    It would be interesting to compare a rent vs. buy within same city/community. Utilities should be the same. It is the difference between rent vs. insurance, taxes, maintenance. The more homes I own, the more I question whether they are good investments. There’s always something expensive to replace!

    Anyway, nice piece. I enjoyed it!

    1. I’m glad this inspired you to analyze the reality of a paid off mortgage. I really like the idea of comparing renting and buying within the same community as well! Nice idea. I have had people comment on social media about how my number compares to their renting numbers, but location matters so much! The size of the place being rented versus the size of the paid off house matters too. I’m sure there’s a better way to compare things if someone wants to dive deeper and do the research.

  5. We paid off our mortgage in 2017 and we still spend 5 figures to live in our house. Property Taxes and homeowners insurance make up the bulk of our costs. Our homeowners insurance renewal had a 60% increase this year, so naturally we shopped around but are still dealing with a 35% increase. It really does make us wonder if we should stay in the house long term.

    Gald we’re not the only ones dealing with high cost of mortgage free living!

    1. Thanks for stopping by the blog Dragon Guy. Insurance and property taxes come out on top for us as well. A 60% increase?! In what other industry (other than insurance) can people get away with such rate hikes? The idea of shopping around to maximize gets exhausting too. Thanks for sharing.

  6. I keep a track of our figures each year and have the same conclusion. Ive been trying educate my son, who is about to start his first mortgage, that there are many more costs involved.

    1. You’re right! It might have been wise to work out these numbers more closely before we bought the place. We love the house and are fine obviously, but it would have been good to know!!!

  7. our house has been paid off for 4-5 years. i roughly calculated around 8 grand/year to stay in the place, but we like our big stone fortress from the 1860’s! it’s bulletproof and maybe nuclear bomb proof. here is our roof experience. we spent a lot of money, over 30k, on a roof with asbestos abatement a couple of years ago. we’re now eligible for an insurance discount just due to that improvement. that comes with a catch, though. it requires an inspection inside the house and the replacement coverage is less.

    a word of caution on maint. that i have learned. keep that 2k/year aside and don’t spend it on years you don’t need it. those expenses are lumpy and the year that costs you 6k you’ll be glad you didn’t spend on the lighter years…..says the guy who’s household spent the excess in the past.

    1. Thanks for sharing and stopping by the blog. Older homes can be a different case for sure. Wow! $30,00 for a roof?! We are about to redo our roof next summer. We hope we have over-budgeted by putting aside $20,000. I hope we don’t find any surprises like you did!

  8. Yes to all of this! Paying off our home is a major part of our FI journey but we know it’s not going to be free to live in. I love how you broke out all of these expenses. I know the pain of the laundry and electricity bills when you’re cloth diapering (we did it 3 times and would do it again in a heartbeat)!

    You had such a positive attitude about each expense! Great post!!

    1. Thanks for stopping by the blog Government Worker FI! Cloth diapering sure has its pros and cons! Good for you for making it 3 times. He still gets a disposable overnight. I’m not sure how that mystery works with a cloth diaper.

      Best wishes on your mortgage payoff journey!

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