How Much Should You Budget for Homeowner Costs

Posted in Property on July 28, 2022

Finding the cash for all the bills that home ownership can bring your way can be difficult, particularly if you’ve never lived on your own before. If you’ve previously lived in a rented property, you might think that you have a good idea of how much you’re going to have to pay on things like council tax and utility bills, but it isn’t easy to plan for your entire range of home-owning expenses completely.

That’s because when you move into your own house, you have a new cost that you need to think about that never bothered you before – maintenance. Although you might have handled a few home maintenance jobs yourself in the past, the chances are that your parents or your landlord did the majority of the work for you. So how can you ensure you have enough cash saved?

What to Consider When Planning Home Costs

When you’re planning your budget for your new home ownership experience, there are a lot of different considerations to take into account. You need to make sure that you can afford your monthly mortgage payments, but you’ll also need to consider things like gas and electric, broadband, and other expenses too. If you’ve rented a property before, you can check out the average homeowner costs you were used to there as a starting point.

Start by writing down the monthly cost for your mortgage, then add in the average cost of things like gas, electricity, broadband, and council tax. If you’re moving to a new area, you may need to get some quotes for a more accurate budgetary plan here. Remember that different areas can come with different expenses. You’ll also need to think about home maintenance on a deeper level.

Maintenance is something that can vary drastically depending on the kind of home you have. If you’re moving into a home that was built in the last decade, there’s a good chance that you won’t need to get a lot of expensive work done. Alternatively, if you’re moving into a house that’s been around for several decades, then you might need to pay a little more.

Check out the information you got from the previous homeowner before you purchased the house to see whether there are any known issues that you need to be aware of, like problems with the roof or plumbing.

Simple Rules for Home Maintenance

If you have absolutely no idea where to start when it comes to budgeting for home maintenance, you could always start with one of the many rules that have worked for homeowners just like you. For instance, a good rule of thumb involves saving around 1% of the value of your home towards maintenance each year. That means that if your house costs £200,000, you would save around £2000 aside for maintenance from your income every year.

This rule is popular, but it does have its limitations. For instance, if you’re buying an old house that already has pre-existing problems, there’s a good chance that you’re going to need to spend a little more than the average on maintenance. Additionally, if you got your house for a really good deal because of a fluctuation in the market, then you may need to spend more too.

There’s another rule available that involves budgeting around £1 per square foot for each of your repair and maintenance costs. This rule can be a little more consistent than the 1% option because it looks at the size of your home. The more square feet you have to manage, the more you save for repairs – just in case.

Preparing for all the Costs of Home Ownership

Getting out a mortgage loan so that you can purchase the home of your dreams is an excellent way to make an important step in your life. However, this kind of loan is something that you will need to plan very carefully. Before you start borrowing any money for your home, make sure that you can afford all of the living expenses that come attached to home ownership. Remember, you’re not just swapping rent for a mortgage, there are many challenges involved with home ownership that add some extra expenses to being on the property ladder.

Although having your own home has a lot of benefits, it’s important to be properly prepared for the challenges that having a mortgage can bring. The more you prepare in advance for every cost – including maintenance, the more confident you can be.