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Principal and interest payments are often only a small part of what it actually costs to own a home.
To get a good idea of what your home really costs, taxes, insurance, utilities, landscaping, and repairs all need to be taken into account.
Buying a home can be a great decision, but you'll want to make sure that you have realistic expectations of the financial obligations that will come with it.



Buying a home is a unique shopping experience. While it may be no problem keeping feelings out of the equation when shopping for groceries or insurance, buying a home can lead to strong emotions.

Because of this, it's easy to fall in love with a home before you even hear the asking price. It's also easy to plug numbers into any online mortgage calculator and convince yourself that the monthly payment would be manageable.

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Unfortunately, mortgage calculators can be incredibly misleading. They often don't take into account insurance, taxes, utilities, HOA fees, and the other "hidden" costs of home ownership.

With that in mind, I decided to take an inventory of all the expenses that are related to my home. The area where you live and the size of your home will obviously cause your costs to be different than mine. But this will at least give you an idea of the kinds of expenses that you may deal with as a homeowner.
What it costs to own my home

My wife and I live in South Daytona, Florida with our preschooler and toddler. We bought our home about five years ago for $90,000. It's a 3-bedroom, 2-bath home with 1,361 square feet of living space. Our home has a one-car garage and a nice-sized half-acre yard.

To get the full picture of what it really costs to own my home, I needed to consider three different types of expenses: monthly fixed costs, monthly variable costs, and quarterly or annual costs.
Our home's monthly fixed costs include the principal and interest on our home loan and taxes and insurance which are also included in our monthly mortgage bill
Our variable monthly costs include our electricity and utilities
Our quarterly or annual expenses include our quarterly pest control bill, annual termite bond renewal, and annual HVAC and riding-mower tune-ups

To find the monthly cost of owning my home, I began by averaging out all our variable expenses. For instance, to find our "average" electric bill, I added the 12 bills together and then divided by 12 to find that our average bill is $145.

And for quarterly or annual expenses I just divided them by four or 12. After punching a few numbers into the calculator, I had found what it costs to own my home on a monthly basis.

Principal and interest: $425/month
Taxes: $70/month
Insurance: $139/month
Utilities: $75/month
Electric: $145/month
Pest Control: $13/month
Termite Bond Annual Renewal: $8/month
Annual AC Check-up: $13/month
Riding Mower Annual Tuneup: $13/month
Total Monthly Cost: $901

Do you see now why mortgage calculators simply don't show the full story of how much it costs to own a home? My "other" expenses are more than double what I pay each month towards principal and interest.

And keep in mind that we don't have any HOA fees in our neighborhood and we don't pay for landscaping — two very common homeowner expenses.