The hidden costs of owning a home

You’ve spent months scrolling through listings and dreaming about life in your new home. Now all the pieces are finally in place. It’s time to buy! Whether it’s your first home or you’ve done this before, you don’t want to be surprised by unexpected expenses.

To help you plan ahead, we rounded up some of the most common hidden costs of homeownership, including:

• Property taxes and insurance
• HOA or condo fees
• New door locks and tools
• Higher utility bills
• Maintenance and repairs

What’s included in a mortgage payment

Your mortgage payment often includes more than just the loan and interest. Lenders may also factor in other essential costs to make sure those bills are paid. Online real estate listings may provide some of this information, but the amount you’ll pay also depends on your down payment and the type of mortgage.

• Property tax: Pays for schools, libraries, parks, police, streets, and more. Costs vary widely by neighborhood, so check the real estate listing or the county or municipality website for a closer estimate.

• Property insurance: Helps pay for repairs if something happens to your home and is covered by your policy.

• Flood insurance: Required for homes in FEMA-designated high-risk zones. To see if this applies to a potential new home, visit floodsmart.gov.

• Mortgage insurance: If you get an FHA or USDA loan or put down less than 20% with a conventional loan, you’ll likely pay for some type of coverage.

• Homeowners association or condo fees: Pays to maintain shared spaces and cover services like landscaping and snow removal. Be sure to ask about any special assessments, which are separate fees for large projects. Note: Many homeowners pay their HOA directly, but certain FHA and USDA loans require these fees to be rolled into the monthly mortgage payment.

Moving in and the “first-year tax”

The first-year tax is shorthand for expenses that home buyers didn’t realize they needed, like ladders, garden hoses, and so many curtains! A 2025 Zillow study estimates that new homeowners spend close to $16,000 in the first year, which can be quite a surprise. In high cost of living areas like New York and San Francisco, the first-year tax is in the $20,000+ range.

Fortunately, you don’t have to buy everything at once. You can explore other options, too. Ask your neighbor if you could borrow a ladder or see if there’s a local library that lends home and yard tools .

Prioritize what’s important to you then tackle the remaining items as your budget allows. Here are some examples:

• Exterior door locks: Changing the locks costs around $150 per door and is often the first thing new homeowners do. Be sure to recode the garage door opener, too.

• Safety devices: Purchase a fire extinguisher and carbon monoxide/smoke detector for every floor.

• Window treatments: The cost of curtains, blinds, and hardware adds up quickly. Consider buying basic treatments for rooms that don’t face the street, then upgrade over time.

• Tools: Start with the essentials, such as a ladder, drill, hammer, and several screwdrivers, then add to it as the need arises.

Keeping your home running smoothly

Some of the biggest surprises for new homeowners are costs their landlord used to handle. While not as exciting as new furniture or artwork, they’re the key to a comfortable home.

• New services: You’ll pay your city or municipality for services like trash and recycling pickup. Building a new home? Plan for one-time costs to connect water, gas, and electricity, which can run hundreds or even thousands of dollars.

• Climate control: Bigger homes come with bigger utility bills. If you’re moving from an apartment to a house, these costs could double or even triple.

• A healthy yard: Lawns and landscaping often need weekly watering, so expect a spike in your water bill this summer. (Did we mention you’ll have to pay for water, too?) If weekend yardwork is not for you, you may need to budget for lawn care service.

• Maintenance and repairs: A common rule of thumb is to budget 1% to 2% of the value of your home for things like gutter cleaning, HVAC servicing, pest control, and anything that breaks during the year. Open a separate savings account dedicated to home maintenance, like Flagstar Performance Savings or Flagstar Ready Savings.

Although it may seem daunting at first, these costs are manageable if you take your time and buy things as you can. As one homeowner put it: “The biggest hidden cost is patience. It takes time to turn a house you just bought into a home that reflects your life and your family. Pace yourself and enjoy the journey."