Unexpected living expenses for first-time homeowners

Congratulations on becoming a first-time homeowner! You’re diving into a huge investment of both time and money, and the best way to make sure you’re successful is by budgeting properly for your living expenses.

There’s a lot more to home ownership than just mortgage payments and mowing the lawn. Keeping a clean, stylish, well-maintained home comes at a price, and often one much higher than you think.

“The true cost of home ownership is often around 40 per cent higher than your mortgage payment alone.”

RateSupermarket.ca

Basic Living Expenses

No matter where you live in Canada, these are essential living expenses for almost all homeowners:

  • Mortgage payments and interest
  • Mortgage insurance
  • Property taxes
  • Condo fees (if you live in condo)
  • Utilities
  • Property care and the related tools (i.e. snow blower, lawn mower, weed removal service)
  • Security (i.e. cameras)
  • Renovations and upgrades (i.e. new thermostat and energy saving windows)
  • Maintenance and upkeep (there’s a detailed list below)

Maintaining your home will cost you about 1 – 2% of your home value per year, according to Harvard University Joint Center on Housing Studies.

Unexpected Living Expenses

Things like renovations and new furniture may be obvious to most, but there are other hidden living expenses that come along with owning your new home.

Make sure you factor these into your monthly and annual budget along with your mortgage payments:

  • Replacing the roof
  • Digging up the driveway
  • Buying a new furnace, air conditioner, or water softener (or rental fees if you don’t own them)
  • Replacing large appliances like the stove, washer, or dryer
  • Fixing electrical issues
  • Flooding repairs
  • Foundation cracks
  • Repairs from wind and ice storms (i.e. broken tree branches and windows)
  • Child-proofing materials (i.e. fencing, baby gates, security system, etc.)
  • Fireplace cleaning and chimney repairs
  • Pest control (i.e. mice, racoons, skunks)

Even if it doesn’t need to be done in the first year or two, it’s a wise idea to put aside money for large repairs so you’re not causing yourself cash flow issues when it comes time to cough up the dough for a new roof or furnace.

If you let repairs and maintenance slide, then any home insurance claims you make related to that wear and tear could be denied by your insurance provider. Nobody enjoys that.

Typical Home Maintenance

For many Canadians, your home is the largest investment you’ll make in your lifetime. Regular cleaning and maintenance not only makes life better for you, but it also increases the value of your home. (A fixer-upper is a lot harder to sell than a meticulously maintained property.)

Here are some of the typical tasks you’ll do to maintain your home:

  • Cleaning your home
  • Yard care (i.e. lawn company to spray for grubs and weeds)
  • Landscaping and gardening
  • Gutter cleaning
  • Driveway sealing
  • Duct cleaning
  • Pressure washing and staining
  • Painting exterior and interior
  • Repairing shingles and roof
  • Updating flooring and tiles
  • Replacing leaky faucets and shower heads
  • Refinishing or painting cabinets or paneling
  • Adding storage (i.e. new shed or shelves)
  • Finishing/upgrading basement
  • Replacing old windows or doors for energy efficiency

 

Don’t Forget Closing Costs

What are closing costs? They’re the many fees and one-time expenses that everyone must pay when purchasing their home, but they are often overlooked in the budget.

“All in, you’re usually looking at an average of 2 to 5 percent of the total cost of the home.”

Rebecca Mason, The Balance

These costs include:

  • Mortgage broker fees
  • Mortgage discharge costs
  • Lender application fees
  • Legal fees
  • Land transfer tax
  • Real estate commission
  • Moving truck or storage POD rental
  • Moving materials (boxes, bins, bubble wrap, packing tape, etc.)

There is no industry standard for real estate commissions in Canada, but they are typically between 3 and 7%. Speak to your realtor about their rates before you sign any deal – even 1% can mean the difference of thousands of dollars.

How expensive is living in Canada?

Canada is widely recognized as one of the best countries in which to live, but at what cost?

When it comes to the essentials, take a look at how Toronto and Montreal stack up against other popular cities in the world (according to TransferWise):

CityMonthly rent, 1-bedroom flatMeal for 2Transportation (monthly pass)
Toronto$1,632.92$70$143.25
Montreal$986.82$60$83
London (UK)$2,781.11$91.08$218.59
New York$3,809.12$94.86$151.78
Berlin$1,094.74$58.32$118.10
Sydney$2,622.22$79.98$159.96

 

What are monthly living expenses for a family vs single?

Of course, your household expenses vary greatly depending on how many people are living there and where you actually live.

We’ll run with the same data from TransferWise in keeping with the Toronto example, but keep in mind it’s the second most expensive city in Canada:

  • A single person can live on $1,038.73 per month (without rent or mortgage)
  • A family of four will need more than three times that amount, at $3,790.91
  • The average rent in Toronto is $2,049, making the family’s monthly total $5,839.91 (at least)
  • The total monthly living expenses for the single person is $3,087.73
  • That’s nearly $6,000 per month for a family of four, without any extras like vacations and entertainment

Average Monthly Living Expenses by City in Canada

How much it costs to be a homeowner also depends a lot on where you live. Canada has many exceptional cities, but that natural beauty can cost money.

From highest to lowest, these are the average monthly living expenses in Canada for 2020. They’re based on two people living in a fully furnished 900 square foot living space:

CITYRENTUTILITIESLUNCHTRANSIT PASSTOTAL
Vancouver$2,143$2,143$17$107$2,374
Toronto$2,049$130$17$145$2,341
Yellowknife$1,800$410$22$59$2,291
Kelowna$1,831$203$22$64$2,120
Mississauga$1,633$183$22$137$1,975
Victoria$1,627$123$18$84$1,852
St. John’s (NFL)$1,388$318$17$77$1,800
Calgary$1,456$211$19$103$1,789
Ottawa$1,455$138$20$115$1,768
Nanaimo$1,567$96$19$65$1,747
Edmonton$1,305$257$20$95$1,677
Barrie$1,376$214$18$87$1,695
Winnipeg$1,308$190$17$98$1,613
Regina$1,264$227$19$86$1,596
Oshawa$1,208$229$16$128$1,581
Hamilton$1,195$227$17$102$1,541
Saskatoon$1,247$169$17$82$1,515
London$1,188$202$21$83$1,494
Halifax$1,128$179$22$79$1,408
Charlottetown$1,063$243$18$66$1,390

Additional sources:

  • https://www.expatistan.com/cost-of-living/country/canada
  • https://www.slice.ca/money/photos/most-expensive-places-live-in-canada/
  • https://www.numbeo.com/cost-of-living/in/Edmonton

 

You have everything you need to start budgeting for your new home and protecting yourself with the right coverage. Enjoy the new place!

Congratulations on becoming a first-time homeowner! You’re diving into a huge investment of both time and money, and the best way to make sure you’re successful is by budgeting properly for your living expenses.

There’s a lot more to home ownership than just mortgage payments and mowing the lawn. Keeping a clean, stylish, well-maintained home comes at a price, and often one much higher than you think.

“The true cost of home ownership is often around 40 per cent higher than your mortgage payment alone.”

RateSupermarket.ca

Basic Living Expenses

No matter where you live in Canada, these are essential living expenses for almost all homeowners:

  • Mortgage payments and interest
  • Mortgage insurance
  • Property taxes
  • Condo fees (if you live in condo)
  • Utilities
  • Property care and the related tools (i.e. snow blower, lawn mower, weed removal service)
  • Security (i.e. cameras)
  • Renovations and upgrades (i.e. new thermostat and energy saving windows)
  • Maintenance and upkeep (there’s a detailed list below)

Maintaining your home will cost you about 1 – 2% of your home value per year, according to Harvard University Joint Center on Housing Studies.

"100% less insurancey. Low guaranteed car insurance rates!" Beside an image of two pink lawn flamingos above the aha insurance logo.

Unexpected Living Expenses

Things like renovations and new furniture may be obvious to most, but there are other hidden living expenses that come along with owning your new home.

Make sure you factor these into your monthly and annual budget along with your mortgage payments:

  • Replacing the roof
  • Digging up the driveway
  • Buying a new furnace, air conditioner, or water softener (or rental fees if you don’t own them)
  • Replacing large appliances like the stove, washer, or dryer
  • Fixing electrical issues
  • Flooding repairs
  • Foundation cracks
  • Repairs from wind and ice storms (i.e. broken tree branches and windows)
  • Child-proofing materials (i.e. fencing, baby gates, security system, etc.)
  • Fireplace cleaning and chimney repairs
  • Pest control (i.e. mice, racoons, skunks)

Even if it doesn’t need to be done in the first year or two, it’s a wise idea to put aside money for large repairs so you’re not causing yourself cash flow issues when it comes time to cough up the dough for a new roof or furnace.

If you let repairs and maintenance slide, then any home insurance claims you make related to that wear and tear could be denied by your insurance provider. Nobody enjoys that.

Typical Home Maintenance

For many Canadians, your home is the largest investment you’ll make in your lifetime. Regular cleaning and maintenance not only makes life better for you, but it also increases the value of your home. (A fixer-upper is a lot harder to sell than a meticulously maintained property.)

"You'll be done in 3 minutes. It's easy! Get low car insurance rates" beside a hand holding a pocket watch, above the aha insurance logo with icons for car and home insurance.

Here are some of the typical tasks you’ll do to maintain your home:

  • Cleaning your home
  • Yard care (i.e. lawn company to spray for grubs and weeds)
  • Landscaping and gardening
  • Gutter cleaning
  • Driveway sealing
  • Duct cleaning
  • Pressure washing and staining
  • Painting exterior and interior
  • Repairing shingles and roof
  • Updating flooring and tiles
  • Replacing leaky faucets and shower heads
  • Refinishing or painting cabinets or paneling
  • Adding storage (i.e. new shed or shelves)
  • Finishing/upgrading basement
  • Replacing old windows or doors for energy efficiency

Don’t Forget Closing Costs

What are closing costs? They’re the many fees and one-time expenses that everyone must pay when purchasing their home, but they are often overlooked in the budget.

“All in, you’re usually looking at an average of 2 to 5 percent of the total cost of the home.”

Rebecca Mason, The Balance

These costs include:

  • Mortgage broker fees
  • Mortgage discharge costs
  • Lender application fees
  • Legal fees
  • Land transfer tax
  • Real estate commission
  • Moving truck or storage POD rental
  • Moving materials (boxes, bins, bubble wrap, packing tape, etc.)

There is no industry standard for real estate commissions in Canada, but they are typically between 3 and 7%. Speak to your realtor about their rates before you sign any deal – even 1% can mean the difference of thousands of dollars.

How expensive is living in Canada?

Canada is widely recognized as one of the best countries in which to live, but at what cost?

When it comes to the essentials, take a look at how Toronto and Montreal stack up against other popular cities in the world (according to TransferWise):

CityMonthly rent, 1-bedroom flatMeal for 2Transportation (monthly pass)
Toronto$1,632.92$70$143.25
Montreal$986.82$60$83
London (UK)$2,781.11$91.08$218.59
New York$3,809.12$94.86$151.78
Berlin$1,094.74$58.32$118.10
Sydney$2,622.22$79.98$159.96

 

"We ditched the bait and switch before we began. Don't get tricked!" Beside a carrot on a stick above the aha insurance logo.

What are monthly living expenses for a family vs single?

Of course, your household expenses vary greatly depending on how many people are living there and where you actually live.

We’ll run with the same data from TransferWise in keeping with the Toronto example, but keep in mind it’s the second most expensive city in Canada:

  • A single person can live on $1,038.73 per month (without rent or mortgage)
  • A family of four will need more than three times that amount, at $3,790.91
  • The average rent in Toronto is $2,049, making the family’s monthly total $5,839.91 (at least)
  • The total monthly living expenses for the single person is $3,087.73
  • That’s nearly $6,000 per month for a family of four, without any extras like vacations and entertainment

 

Average Monthly Living Expenses by City in Canada

How much it costs to be a homeowner also depends a lot on where you live. Canada has many exceptional cities, but that natural beauty can cost money.

From highest to lowest, these are the average monthly living expenses in Canada for 2020. They’re based on two people living in a fully furnished 900 square foot living space:

CITYRENTUTILITIESLUNCHTRANSIT PASSTOTAL
Vancouver$2,143$2,143$17$107$2,374
Toronto$2,049$130$17$145$2,341
Yellowknife$1,800$410$22$59$2,291
Kelowna$1,831$203$22$64$2,120
Mississauga$1,633$183$22$137$1,975
Victoria$1,627$123$18$84$1,852
St. John’s (NFL)$1,388$318$17$77$1,800
Calgary$1,456$211$19$103$1,789
Ottawa$1,455$138$20$115$1,768
Nanaimo$1,567$96$19$65$1,747
Edmonton$1,305$257$20$95$1,677
Barrie$1,376$214$18$87$1,695
Winnipeg$1,308$190$17$98$1,613
Regina$1,264$227$19$86$1,596
Oshawa$1,208$229$16$128$1,581
Hamilton$1,195$227$17$102$1,541
Saskatoon$1,247$169$17$82$1,515
London$1,188$202$21$83$1,494
Halifax$1,128$179$22$79$1,408
Charlottetown$1,063$243$18$66$1,390

Additional sources:

  • https://www.expatistan.com/cost-of-living/country/canada
  • https://www.slice.ca/money/photos/most-expensive-places-live-in-canada/
  • https://www.numbeo.com/cost-of-living/in/Edmonton

 

You have everything you need to start budgeting for your new home and protecting yourself with the right coverage. Enjoy the new place!

Seriously, what else can you do in 3 minutes?

Boil half an egg?

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