Owning a home takes more than just paying your mortgage. It’s also about keeping up with repairs, maintenance, and the occasional renovation to keep your property safe, efficient, and enjoyable. But how much should you actually budget for all of that, especially over decades of ownership?
Let’s break down what to expect and how to plan smartly – so you’re never caught off guard by the “hidden” costs of maintaining your home.
A Good Rule of Thumb: 1% - 4%
According to the Joint Center for Housing Studies at Harvard, annual maintenance costs average between 1-2% for most homes. Though if you're able to set aside a little more, it may come in handy – especially if an accident or unexpected repair arises.
So, a good starting point is to prepare to set aside somewhere between 1% - 4% of your home’s value per year for maintenance, repairs, and renovations.
- On a $400,000 home, that’s $4,000-$16,000 per year (or roughly $330-$1,300 per month).
- Homes that are newer, smaller, or in mild climates may land near the lower end.
- Older homes, larger properties, or those in extreme climates often need more frequent repairs and updates.
Think of this as a flexible baseline to help you prepare for both routine upkeep AND those inevitable big-ticket repairs like roofing, HVAC replacement, or major appliance updates.
How Repair and Renovation Needs Evolve Over Time
Not every year will look the same. Maintenance costs often follow a pattern based on your home’s age:
Older homes may need more frequent or specialized work, especially if prior owners deferred maintenance.
Climate and Location Matter
Where you live plays a major role in how much you’ll spend maintaining your home:
- Humid climates (like Florida or Texas): Expect faster wear on roofing, paint, and HVAC systems due to moisture and heat.
- Cold-weather states (like Minnesota or New York): Budget for snow load, ice dam prevention, and heating system maintenance.
- High-cost-of-living areas (like California or Massachusetts): Labor and material costs run higher, so your savings might need to skew upward.
- Dry, moderate climates (like Colorado or Arizona): You’ll likely spend less on weather-related wear, but more on landscaping or sun exposure damage.
If you’re buying in a new state, it’s worth researching regional repair averages to understand what “normal” looks like in your area.
How Renovations Fit In
Renovations are where we go beyond maintenance. They’re about improving comfort, efficiency, or value – but ideally, all three! While they’re not recurring yearly expenses, you can plan for them just like you would a car replacement or college fund.
A smart approach is to try to set aside a portion of your home’s value every 10-15 years (often 10-20%) for major updates like kitchens, bathrooms, or exterior work.
For a $400,000 home, that’s roughly $40,000-$80,000 over that span, or $275-$550 per month when averaged out.
Bundling renovations together (for example, updating all flooring at once) often reduces labor costs and avoids repeated disruptions.
Building Repairs and Renovations Into Your Budget
When thinking about how much home you can truly afford, remember that your mortgage payment is only part of the story. A complete monthly housing budget includes:
- Mortgage principal and interest
- Property taxes and insurance
- Utilities and homeowners’ association fees (if applicable)
- Maintenance and repair reserves
Lenders typically don’t account for ongoing maintenance in loan approvals, but YOU should. Setting aside even $300-$500 a month can prevent financial stress when something inevitably breaks or needs updating.
When Your Home Feels Like “Too Much”
If you’ve realized your home requires more upkeep or costs more to maintain than you’re comfortable with, you’re not alone. Rising repair costs and interest rates have left many homeowners feeling stretched thin.
Before making any big moves, consider:
- Refinancing or restructuring to free up monthly cash flow.
- Using your home equity with a partner like Unison to fund essential repairs or updates.
- Downsizing to a lower-maintenance home or location that better fits your long-term budget and lifestyle.
Unison can help homeowners explore flexible ways to access their equity, without the steep monthly payments that come with most traditional loans.
The Bottom Line
Every home needs care, and that care comes with a cost. But with a solid plan, it doesn’t have to be overwhelming. By setting aside between 1% and 4% of your home’s value annually and adjusting for your home’s age, climate, and local costs, you can keep your home in top shape and avoid major financial surprises.
If you’re still in the homebuying process, and the idea of being able to save that amount seems like a stretch, it’s a sign that your budget might be a little higher than it should be. Nobody likes to “think smaller”, but it’s far better to buy and own a home that you can comfortably afford (and make your own over the years!), instead of being stuck in a property you may struggle to maintain.
If you ever need help making those big repairs or renovations happen, Unison offers a flexible way to tap into your home’s value – helping you protect and improve your investment on your own timeline.
Disclaimer: This content is provided for general informational and educational purposes only and is not intended to serve as financial, investment, legal, tax, or lending advice. The information presented may not apply to your specific situation, and actual outcomes can vary based on individual circumstances, market conditions, and applicable laws. Home equity sharing agreements and loans involve risks, including the potential loss of future home appreciation or other financial implications. Terms, availability, and eligibility for any products mentioned may differ by state, lender, or other factors. We strongly recommend consulting with a qualified financial advisor, attorney, or licensed professional before making any decisions or entering into agreements. Unison Mortgage Corp. is a licensed lender (NMLS ID 2574289); this article may include promotional content related to its services.