02 What you need to know
What homeownership costs beyond your mortgage payment
Lenders qualify you on PITI: principal, interest, property taxes and homeowners insurance, plus HOA dues and mortgage insurance if you have them. That’s the payment you can see on paper.
Maintenance and repairs aren’t part of PITI, and no lender collects for them. They show up anyway.
Common maintenance and replacement items
- Roof repairs and eventual replacement
- HVAC systems (heating, ventilation and air conditioning)
- Water heater
- Plumbing, including the sewer line to the street
- Electrical panels and wiring, especially in older homes
- Exterior paint, stucco and wood repair
- Termite and pest treatment
- Landscaping and tree trimming
- Appliances
- Foundation and drainage
- Pool equipment and resurfacing
The 1% rule is a starting point
A common planning guideline is to set aside about 1% of the home’s value each year for maintenance. It’s a rough rule of thumb, not a requirement and not a prediction.
Your real number depends on the home’s age, condition, size and location. Some planners use a per-square-foot estimate instead, since a large home costs more to paint and roof regardless of its price. In Los Angeles, where land is a big share of value, a percentage of price may overstate costs on a small home and understate them on an older, larger one.
Condos are different, not free
Your HOA dues generally cover common areas and the building’s major components. You’re usually still responsible for your unit’s interior, appliances, flooring and often your own HVAC and water heater. Check the CC&Rs (the HOA’s governing rules) to see where the line falls.
03 Real-world example
Example: a maintenance budget on a $1,000,000 home
Using the 1% guideline on a $1,000,000 home gives you about $10,000 a year, or roughly $833.33 a month.
Now change the assumption to match the property:
| Property (illustrative) | Rate | Per year | Per month |
|---|---|---|---|
| Newer condo, HOA covers exterior | 0.5% | $5,000 | $416.67 |
| Typical single-family home | 1% | $10,000 | $833.33 |
| 1940s house with original systems | 2% | $20,000 | $1,666.67 |
Assumptions: $1,000,000 value for each property so the rates compare directly. This is a budgeting illustration, not a lender requirement or a cost estimate. Actual costs depend on the home’s age, condition, size and what has already been replaced.
Some years you’ll spend far less. Then the water heater, the roof and a tree removal all arrive in the same year. The point of the monthly number is to have the money ready when that happens.
04 What most people overlook
What people overlook when budgeting for home repairs
- The first year is often the most expensive. Inspection items, deferred repairs and move-in fixes tend to pile up right after closing.
- Older homes need bigger reserves. Original plumbing, older electrical panels and aging roofs can all come due at once.
- Taxes and insurance can rise too. Even with a fixed rate, your total payment can change. See why a fixed-rate payment can still go up.
- Your inspection report is a planning tool. Use the ages and conditions it lists to estimate what may need replacing in the next five years.
Build a sinking fund: a separate savings account you add to every month for home repairs. When something breaks, you pay from the fund instead of a credit card.
05 How I’d approach it
How I’d build maintenance into your home budget
The mortgage payment is the number you qualify on. The maintenance budget is the number that decides whether owning the home feels comfortable.
First, I start with your full PITI using the mortgage payment calculator. That’s the fixed cost.
Second, I add a maintenance line based on the property, not a generic rule. A newer condo and a 1940s house at the same price can have very different needs.
Third, I compare the total against what you’re comfortable spending each month, not just the maximum you qualify for. You can test different prices in the affordability calculator. If the total feels tight, it’s better to adjust the price range now than to drain your savings after closing.