Beyond the mortgage: 5 hidden costs of owning a home.
Uncover the hidden costs of homeownership and turn them into opportunities for growth.
Becoming a homeowner is an exciting milestone, but many first-time buyers (and even experienced homeowners) can be caught off guard by unforeseen costs. While owning a home offers stability, freedom, and a valuable investment, it also comes with financial surprises that renters may not have had to think about. But don’t worry, with a little preparation and knowledge these costs won’t feel quite so overwhelming, and you can enjoy all the benefits of homeownership.
- Land tax, council rates and Insurance
Your monthly mortgage payment is just one piece of the puzzle. Land tax is charged by state/ territory governments on the land you own. Rates vary widely depending on where your home is situated.
Council rates are property taxes that every Aussie homeowner must regularly pay to their local council to maintain and improve local community services and facilities.
Homeowners’ insurance is essential for protecting your investment. While these costs can add up, they provide peace of mind knowing that your home and finances are protected.
- Maintenance, repairs and renovations
Unlike renting, where a landlord handles repairs, homeowners are responsible for fixing things when they break. From leaky taps to overflowing gutters, costs can vary. By setting aside a small emergency fund, you can make unexpected repairs much less stressful. The upside? By making improvements, you are adding value to your home, turning these costs into an investment rather than just an expense.
“If you purchase a home that needs extensive renovation, without realising the current high building costs to renovate it, it can mean a renovation is unaffordable or that it may end up overcapitalising the value of the property,” says Belle Property Neutral Bay Principal Matthew Smythe.
The upside can be enormous if you do your research. Matthew adds, “If you can renovate your home carefully and cost-effectively, you can accelerate its increase in value, rather than just waiting on property market capital growth.”
- Utility bills and home services
Owning a home often means higher electricity and gas bills, especially if you’re heating and cooling a larger space. If you have moved into a home with a garden, you may see unexpected increases in your water bills. Plus, there can be additional costs to consider such as potential strata fees if you live in an apartment, townhouse, or duplex. The silver lining? You have more control over your energy efficiency and by upgrading to smart thermostats, LED lighting, water and energy-efficient appliances you can significantly lower utility bills over time.
- Furnishings and décor
A new home often means new spaces to fill or windows to cover, which can lead to unexpected spending on furniture and décor. While it’s tempting to furnish everything at once, taking your time and focusing on quality over quantity can make the process more enjoyable and budget-friendly. Personalising your space is one of the best parts of homeownership - you get to make it truly your own.
- Landscaping and lawn care
If your new home comes with a yard, maintaining it is another cost to consider. Whether you hire landscapers or invest in lawn equipment, keeping your outdoor space looking great requires time and money. If you can find a little time, gardening and lawn care can be rewarding hobbies, and a well-maintained garden adds major curb appeal (and value) to your home.
Yes, homeownership comes with unexpected costs – but it’s worth it
While there are expenses beyond your mortgage, the rewards far outweigh them. Building equity, having the freedom to make your space a uniquely yours, and creating a home that reflects your lifestyle are benefits you simply can’t put a price on.
With smart budgeting and a proactive approach, these additional costs become manageable, turning what may feel like challenges into opportunities to grow your investment.
So, while it’s important to be aware of the extra costs, don’t let them hold you back. Homeownership is a journey - and with the right planning, it can be one of the most fulfilling and valuable investments you’ll ever make.