The True Cost of Owning a Home in 2026

There’s a good reason buyers tend to hyperfixate on their monthly mortgage payment: It’s often the number standing between them and the keys to their new home.

But fast-forward a year or a decade, and many are shocked by what comes next: a leaking roof, a surprise insurance hike, or a much higher tax bill than expected at resale. The real costs of homeownership extend far beyond the mortgage, yet these costs are rarely factored into homeowners’ budgets.

“I’ve seen buyers obsess over their mortgage payments and get blindsided by postclosing costs,” says Cody Schuiteboer, president and CEO of Best Interest Financial, a mortgage solutions company. “And in 2026, those surprises are hitting even harder.”

That’s why, he adds, “I tell every buyer: Your mortgage payment is a floor, not a ceiling.”

It’s an important shift for buyers and owners alike: Instead of treating your mortgage payment as the upper limit of what you can afford, think of it as the starting point. The real cost of homeownership includes everything stacked on top—insurance, taxes, repairs, and more—and you need to leave plenty of financial room for those expenses.

But just how much room, exactly? We spoke to the experts to find out.

Insurance instability is likely to be the biggest budget buster in 2026

If 2025 was the year homeowners discovered how volatile insurance could be, 2026 may be the year it fully risks their budgets.

“Homeowners insurance is pushing the budget in 2026 over the edge, not interest rates,” says Ryann Brier, licensed real estate agent and investor at City Lights Home Buyers. 

He warns that even relatively stable markets aren’t immune: “I have been warning my clients that insurance could spike another 8% to 10% this next year, and to build a buffer in their budgets so they’re not completely blindsided when insurance renews.”

To his point, premiums have spiked nearly 70% since 2021, and they’re projected to climb an additional 16% by 2027, according to projections from Cotality. A mix of rising reconstruction costs, growing weather-related risks, and stricter underwriting practices is pushing rates higher. And as those pressures continue into 2026, insurance costs are likely to keep rising right along with them.

In distressed areas, the hikes can be even higher, says Rami Sneineh, vice president and licensed insurance producer at Insurance Navy.

“I am seeing renewals in which premiums increased by 18% even though the homeowner never made a single claim over the previous year,” he says.

While there are levers homeowners can pull to drop these costs — like raising deductibles or shopping around for better rates—those strategies often come with trade-offs like coverage gaps. A better strategy is to factor in this cost as a regular, sizable expense from the start.

Property tax pressure will continue in the year ahead

Property taxes remain a major pain point for homeowners—and that pressure isn’t likely to ease in 2026. While states such as Montana and Texas have passed meaningful relief measures, and the federal government raised the State and Local Tax (SALT) deduction cap, many homeowners across the country will likely still feel the squeeze from rising bills.

One reason is that assessments—the basis for your home’s taxable value—aren’t likely to drop significantly, even if market values soften. Another is that millage rates (the actual tax rate applied to your home) tend to stay steady or even increase, as local governments continue to grapple with inflation, rising wages, and budget shortfalls.

But in some markets, buyers face an added challenge: Their tax bill can jump dramatically right after closing.

That’s the case in Michigan, where property taxes are limited to 5% increases or the inflation rate, whichever is cheaper, during ownership. When the home is sold, however, the taxable value resets to the State Equalized Value. It’s a law that catches many first-time buyers off guard.

“In Grand Rapids, uncapping can increase the taxable value by tens or even hundreds of thousands of dollars overnight,” says Brier. “Don’t base your tax bill on what the current owner is paying.”

Instead, buyers should do their own math: Look up the local millage rate and apply it to the State Equalized Value (which is 50% of the sale price), not the prior owner’s assessed value. In states with automatic reassessments or uncapping rules, that’s the only way to avoid getting blindsided by a much bigger bill after closing.

And if the city over-assesses your property? You’re not stuck.

“You have every right to appeal your taxes,” Brier notes. “Work on an appeal if the city assessed your new home at a higher value than you just recently paid.”

The maintenance costs buyers always underestimate

Maintenance is one of the most misunderstood and most underfunded costs of homeownership. While buyers often know to budget for taxes and insurance, they routinely lowball what it takes to keep a home running.

Too many rely on outdated rules of thumb, like setting aside 1% of a home’s value each year for repairs. But in today’s market, with rising labor and material costs and aging housing stock, that number often falls short.

“Don’t cut corners and estimate your house to have 1% maintenance issues,” warns Brier. “Budgeting 2% is really on the low end.”

In colder climates or older homes that are more likely to need major fixes, that reserve may need to go even higher.

“You can go up to 4% of the home’s value when budgeting for annual repairs, especially in the winter months, on an older home in Michigan,” Brier adds.

What makes these line items hard to save for is that maintenance isn’t linear. A home may go years with minimal needs, then require $10,000 to $20,000 in urgent repairs. That’s especially true when major systems are near the end of their life span.

“A roof with 18 of 25 years remaining means a bill of $15,000 to $25,000 in five to seven years,” says Schuiteboer. And those timelines matter when you’re planning to sell, refinance, or rent out the home in the meantime.

Skipping a home inspection to save money upfront can compound the damage.

“One buyer comes to mind who skipped the inspection and found an HVAC system at closing that cost over $12,000 and was 12 years old,” Schuiteboer adds.

Why a low HOA isn’t always a win

For many homebuyers, monthly homeowners association dues or building fees are another afterthought. At best, they’re treated as a stable monthly payment.

“It is vitally important when considering what you are going to purchase, what the total cost of ownership is,” says Nikki Beauchamp, senior global real estate adviser and associate broker at Sotheby’s International Realty. “Inclusive of HOA/common charges.”

In New York City, where Beauchamp is based, co-ops and condos often come with layers of complexity that catch buyers off guard.

“Condos and co-ops have monthly charges,” she explains. “In condominiums, there is a separate tax bill; in cooperatives, a portion of the maintenance is tax-deductible.”

Beyond the monthly dues, buyers also need to watch out for special assessments, which are one-time fees charged to cover major building repairs or capital projects. These can add thousands to a homeowner’s costs with little warning.

“It is also advisable to find out if there are any upcoming assessments that owners will need to participate in,” Beauchamp says, “with as clear an understanding as possible on the projected scope, cost, and timeline of the work.”

Even in suburban or master-planned communities, low HOA dues aren’t always a sign of affordability. In fact, they can signal that the community is underfunded and that a major fee increase may be on the horizon.

“Yes, look for less expensive communities,” says Schuiteboer, “but an HOA with low dues that leads to deferred maintenance is the worst.”

He adds that when long-postponed repairs finally arrive (new roofs, parking lots, or repaved roads), fees often spike 30% to 50% in a single year.

‘Unaccounted-for, true costs can really hurt ’ 

So, just how much do homeowners need to add to their monthly housing expenses? According to Brier and Schuiteboer, between $1,400 and $3,750. Because these costs are often proportional to the home price, the more expensive your home, the higher your monthly carrying costs are likely to be.

Brier routinely walks clients through a reality check on a $300,000 home. Property taxes come in around $425 per month, insurance adds $142, a realistic maintenance reserve is about $500, and utilities like gas, electric, water, and trash run roughly $350. That’s a total of $1,417 in monthly expenses—without a single mortgage payment included. 

“Those numbers don’t lie,” Brier says. “Unaccounted-for, true costs can really hurt.”

At a higher price point, the gap between what buyers think they’ll spend and what they actually spend gets even wider.

Schuiteboer recently helped a client buy a $625,000 home with a 6% mortgage and 10% down. Her monthly mortgage came to $3,750, but her total monthly housing cost was $5,065 once property taxes ($625), insurance ($170), and a maintenance reserve ($520) were added in.

The examples underscore a crucial point: The mortgage may get you in the door, but it’s the recurring and unpredictable costs that determine whether you can afford to stay.