Home Renovation Tips

How much should you have saved for home repairs?

There are a lot of great things about owning a home, but having to finance expensive home repairs isn’t one of them. It’s pretty much a guarantee that you’ll face some sort of home maintenance and/or repair project while owning a home, and costs can vary widely, with some projects running up in the thousands of dollars. For that reason, it’s important to figure out how much you should save for home repairs ahead of time so that you don’t find yourself scrambling to come up with the money to pay for a leaking roof or busted furnace. The better you can budget, the less stress you’ll have when you do face those inevitable repair needs.

There are a few different schools of thought when it comes to how much you should save for home repairs. Which method works best for you depends on your current financial situation, your saving style, and certain factors regarding your home. If you own an older house (think 20 years or older), or if your house is located somewhere that’s prone to weather extremes like harsh winters or flooding, then you’re going to want to budget more for repairs.

It’s impossible to predict exactly what maintenance your home will need, how much it will cost, and when it will become necessary. Average homeowner costs can be helpful, but averages are only a starting point for your home’s annual maintenance budget and don’t take into account your unique circumstances. You must calculate the personal factors that may increase or decrease your maintenance costs on an annual cycle, including the location and age of your home, the weather in your area, and the home’s general condition.

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Why do we need to save for repairs and maintenance?

A first-time homebuyer, particularly one buying a pre-existing house, should think carefully about such expenses. Additionally, one must always remember that the difference between apartment expenses and homeowner expenses is not just the rent payment versus the mortgage payment!

The reality is that stuff happens with houses. You can’t just call the landlord or management company to fix a problem. Rather, you’re responsible. The scope of things for which one becomes can vary depending on the type and age of the home. That being said, here is a small sampling of the types of bigger expenses that might come up:

  • Roof repairs or replacement
  • Siding
  • Gutters
  • Air conditioning
  • Carpeting/flooring
  • Plumbing

Things happen. Often they can be unexpected (plumbing, in my experience) or planned (carpeting). Some expenses can be minor; others can be large. Thus, while home repair costs can be irregular in nature, they do add up overall.

The 1% to 4% range

Generally speaking, you should expect to spend between 1% and 4% of your home’s value each year for maintenance. This means that if the cost of your home is $200,000, you’re looking at spending anywhere from $2,000 to $8,000 a year on upkeep. 

That’s a wide range, so you’ll need to account for factors such as the age of your home and its location. A newer home is apt to require less maintenance than a home that’s 20 years old, or 40 years old, or 60 years old. And homes in areas that experience extreme weather will cost more to maintain than those in moderate climates. 

The square footage system

It stands to reason that your home’s maintenance will cost more if you’re dealing with a larger property as opposed to a smaller one. Another way to budget for home maintenance is to allocate $1 per square foot of your home per year for upkeep. For a 2,000-square-foot property, you’d be looking at $2,000 in maintenance annually.

Home Renovation Tips

However, this method doesn’t take the age or location of your home into account, so if you’re going to use it, you may want to pad whatever number you come up with. 

Don’t confuse home maintenance with major repairs

When we talk about how much money to budget for home maintenance and repairs, we’re talking about run-of-the-mill upkeep and general wear and tear. That includes things like:

  • mowing your lawn and treating your grass,
  • cleaning your siding,
  • power-washing your deck or patio,
  • seal coating your driveway,
  • cleaning out your gutters and vents,
  • replacing filters on your heating and air conditioning units,
  • fixing leaky faucets,
  • swapping out rusted fixtures, and
  • having kitchen or laundry appliances serviced.

But, if you need a major home repair, like replacing a roof or water heater, remediating mould, or fixing a sinking foundation, you’re likely to spend much more than what the above calculations allow for. That’s why it’s wise to go into homeownership with a healthy savings account. That way, you’ll have the funds available to tackle unexpected repairs that aren’t a standard part of maintaining your home.

How much money should you set aside for home repairs? There’s no right answer. You could take the amount you land on for annual maintenance and stick that same sum in a savings account earmarked for home emergencies. If you determine that it’ll cost you $6,000 a year for regular home maintenance, broken down as $500 per month in your budget, you may want to sock away an additional $6,000 in savings for major repairs.

Or, just have a healthy emergency fund, to begin with. That means having enough money in the bank to cover three to six months of essential living expenses. 

Know how much money to budget for home maintenance

When buying a home, don’t just look at its purchase price and property taxes. Make sure you factor in the cost of maintenance to get a sense of whether you can really afford the home. Your real estate agent may be able to advise on typical maintenance costs in the area, so don’t hesitate to ask before moving forward with a home purchase. 

Additionally, once you land on a home you really want to buy, it never hurts to have a discussion with the previous owner to see what his or her maintenance costs looked like. That could be the best way to land on an accurate estimate of what you’re signing up for. At Hitch Property Constructions, we offer a wide range of home renovations.

The Percent Rule

Depending on who you ask, you’ll see experts recommending that you save between 1% of 4% of your home’s purchase price annually for home repairs. As an example, if you bought your home for $250,000, that’s $2,500 to $10,000 a year that should be going into a dedicated savings account.

The logic behind this rule has less to do with the fact that home repairs tend to cost a set per cent of your home’s value and more to do with just making repair savings a rote part of your financial planning. By designating how much you should save for home repairs as a set percentage, you should have an easier time visualizing what to set aside each year. And while you probably won’t come up against $2,500 or $10,000 in repair costs each year, you might find yourself facing a one-time $15,000 repair bill that you’ll be glad you saved in advance for.

So why might you want to save closer to 4% than 1%? It depends largely on the market conditions under which you purchased your home, as well as the home-specific factors we went over before. In terms of market conditions, if you purchased your home in a strong buyer’s market and knew that you underpaid for it, you’re going to be better off putting aside an amount each year that’s closer to what the home’s actual value is, as opposed to what you paid for it.

The Square Footage Rule

Another way to tackle the issue of how much you should save for home repairs is to go by the square footage rule, which dictates that each year you set aside $1 per square foot of your home. If your home is 1,400 square feet then, that’s $1,400 a year into a home repair savings account.

Again, you’re going to need to consider the age and location of your home as well when determining your approach. While the square footage rule is definitely a good rule of thumb to follow (and maybe even a bit more so than the 1% to 4% rule, since your home’s square footage is most likely a greater indicator of its repair cost needs than its purchase price), it still fails to account for those specific factors that play a major role in repair expenses.

Additional Tips for Saving for Home Repairs

Whether you opt for the percentage rule, the square footage rule, or a combination of the two, follow the tips below to fine-tune your saving efforts and maximize your contribution.

Don’t just consider other factors—save for them. 

It’s not enough to just know that you should be saving a bit more if certain factors apply to your home—you need to account for them actively. Add 5% to 10% on to your savings goal for each of the following factors that apply to your home:

  • 20 years or older
  • Poorly maintained by the previous owner(s)
  • Located in an area with weather extremes (think super cold winters, proneness to natural disaster, etc.)
  • Located in an area with high average repair material and labour costs.

Each of these factors plays a big role in how high your repair costs can be, so it’s smart to make them a savings priority.

Keep the money in a cash-ready savings account. 

Saving anywhere is better than saving nowhere, but the best way to go is to keep your home repair savings in a separate, interest-bearing account that you can pull cash out of as needed and without penalty. If you’re organized, you can keep the money in your standard savings account, but if you want to keep a closer eye on your repair budgeting, then you may want to create a savings account just for these funds.

Practice prevention. 

Taking good care of your home reduces your risk of facing lofty repair bills, so stay on top of regular home maintenance. This includes thing like cleaning and replacing your furnace and air conditioning filters on a regular schedule, winterizing your home before cold weather hits, and inspecting things like gutters, downspouts, and roof tiles right away after a storm. In addition to preventing repairs in the first place, this also helps ensure that if something does happen, you catch it in an early (and less expensive) stage.

Save money in other ways. 

Help build up your home repair savings account by making a conscious effort to save money on other homeownership related expenses. Everything from optimizing your home’s energy usage to setting and sticking to a grocery budget means more money in your pocket—and thus more money you can set aside for the occasional big expense. 

Get comfortable with a bit of DIY. 

A lot of the expense of home repairs is related to labour costs. Bringing a professional to your home can cost hundreds of dollars, even for a small job. If you can, try to take on some repair tasks yourself. With DIY blog posts, YouTube videos, and a bit of assistance at your local home improvement store (plus a little bit of time and patience) you can probably do more than you think.

Figuring out how much you should save for home repairs is part and parcel of being a homeowner. And while there’s, unfortunately, no standard way of doing so, you’re already a step ahead just by considering this effort as a necessity. In the past year, 88% of homeowners had to finance a major home repair or improvement project, with an average spend of $4,958. And more than half of homeowners had to manage multiple projects. Since there’s pretty much no escaping the fact that you’ll face a major home repair at some point, and probably at multiple points, the sooner you can make home repair savings a standard part of your annual budgeting the better.

Common home maintenance items

Drilling down into the specifics, what types of things would fall into the home maintenance category? Taylor offers some examples of preventative items and common fixes:


  • Have the HVAC system routinely serviced (following an HVAC maintenance checklist can help keep your system running smoothly).
  • Replace air filters as recommended by the manufacturer (check out this handy timing guide).
  • Vacuum air vents to remove dust as needed.
  • Run hot and cold water in bathrooms that are not often used to prevent sewer gas from leaking into the home.
  • Repair any grout cracks in wet areas with silicone caulk.
  • Clean garbage disposals (Taylor recommends using ice cubes as a thrifty solution).
  • Turn valves under sinks at least once a year to prevent them from getting stuck.
  • Service kitchen appliances as needed to keep them in good working order (Mr. Appliance offers some preventative maintenance tips).
  • Repair squeaky door hinges (try this tip to silence them without the use of any toxic chemicals).
  • Clean out/lubricate window tracks.
  • Clean out faucet aerators to remove hard-water deposits.
  • Test all smoke alarms and replace batteries as needed.
  • Check fire extinguishers once a year to make sure they haven’t expired.
  • Take care of any pest or termite control needs.


  • Seal and/or stain the deck as needed.
  • Clean out yard drains to remove excess leaves and prevent clogs (here’s how).
  • Trim trees and bushes.
  • Touch up any peeling or faded paint (a fresh coat of exterior paint has been shown to increase the home’s value).
  • Freshen up mulch and plants seasonally.

Plan for home maintenance now, and you’ll be grateful when you sell

By having a home maintenance budget, you’ll be better able to keep up with day-to-day upkeep. That means when it comes time to put your home on the market, you’ll already be ahead of the game.

Instead of rushing to take care of a long list of repairs and deferred maintenance, you’ll have more time to focus on decluttering, packing, staging, and enhancing curb appeal to help sell your home faster. Proper maintenance will also preserve your home’s value long term so you can command a price you’re happy with when the time comes to sell.

How to pay for repairs if you didn’t set money aside

Sometimes, major systems fail without warning — your air conditioning quits mid-summer or the water heater bursts on the coldest day of the year. Replacing them may cost several thousands of dollars, depending on the size of your home.

Unfortunately, these are things you can’t ignore. If your home repair fund is too low or doesn’t exist, it can be tough to come up with the money. Luckily, you do have a few options.

Youngbauer says many folks tap their home’s equity to pay for repairs. You can do this by applying for either a home equity line of credit (HELOC) or home equity loan. The interest rate depends on your creditworthiness, which is one possible downside. The biggest risk is losing your home if you can’t pay it back. “If your mortgage payment is already too high, adding to your debt could be a problem,” she warns.

If you decide to pay for repairs with home equity, it’s critical to make sure your payoff plan is realistic. Before applying, review your monthly budget. There needs to be enough wiggle room for another ongoing expense.

Hitch Property Constructions has the best range of renovations services to help you create your dream house.

Don’t get caught off guard

Homeownership is a big responsibility. As soon as you get the keys, start saving for your home repair emergency fund. To stay ahead, save money every month, for as long as you own the home. As problems arise, take care of them promptly. “By ignoring routine maintenance, your home could actually decline in value,” Youngbauer says.

Time to save money for emergency home repairs

Homeownership is a big responsibility with equally big costs. Most people think that the bulk of their costs come with the home down payment and closing, but unexpected home repairs can haunt you years later. As long as you determine how much you should budget for home repairs and come up with a game plan to save, you can enjoy your home stress-free—no scrambling when an unexpected home repair creeps up.

It’s not always possible to stash money away for your annual maintenance fund, and if you’re facing an emergency repair, you might find yourself scrambling. Home equity loans can help homeowners fund necessary maintenance when it’s least expected. Also, many local governments offer weatherization assistance and home repair programs for low-income and aging residents, especially in disaster-prone areas. Your tax dollars fund these initiatives, and you shouldn’t hesitate to reach out for assistance during an emergency.

Keep in mind that there are ways to finance home repairs if you don’t have enough funds on hand when a big bill does roll around.

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