How much does it cost to own a home in Winnipeg?
Aside from the mortgage payment, how much does it actually cost to own a home in Winnipeg? What are all the costs involved in buying a home?
The cost most frequently associated with home ownership is the monthly mortgage payment, which depends heavily on the current interest rates charged by mortgage lenders. However there are many hidden costs to owning and maintaining a home, which many new homeowners may not be aware of.
These costs are rough estimates and an average cost and will vary, depending on the size and construction quality of the home. Heating bills, especially, can vary widely. Water bills are affected by the size of the property (how much lawn will you be watering in July?)
Electricity mostly depends on the size of the household. How many computers, TV’s and bedroom lights will be on every evening? And homeowners insurance depends on many factors, such as age of the home, size and value of the home and even the neighbourhood.
Maintenance costs vary and are closely associated to the age of your home. Older homes will require more upkeep and system replacement (example: HVAC system, roof, windows, plumbing systems and other major systems will need to be upgraded over time)
Property Taxes
Depending on your area, value of the home and surrounding home prices, lot size and about 20 other factors, Property Taxes in Winnipeg can vary from about $1500 a year to tens of thousands a year. This is considered one of the major home owning costs.
Your ‘average’ home owner however should budget for between $200 and $300 per month. That latter would cover a home with a GROSS property tax of $4,300 a year, (minus the current Homeowners Tax Assistance of $700)
Homeowner’s Insurance (Property Insurance)
In a house, the owner needs to protect the entire building (and any outbuildings) from a variety of perils. Again depending on the home value the insurance will vary, but as a general point of reference, it’s a good idea budget between $75 and $100 per month. In a high-rise condo, this will be significantly lower cost to own a home.
It should be noted that insurance companies often look at the replacement cost, rather than the actual cost of the home. As an example, the home’s purchase price might have been $350,000, but your homeowner’s insurance company determines that it would cost $420,000 for a home builder to replace it.
This of course depends on current construction costs. As a general rule, it is a good idea to go with the higher insured value.
If you instead to insure your own home for just the sale price, you will only be covered for a percentage of your overall loss.
Heating & Electricity
Combined, the owner should budget for between $120 to $220 a month, approximately. Much depends on the size of the home and family, as well as the quality of the home’s insulation.
Another important factor is the method by which your house is heated: In many areas, electric heat is much more expensive than gas. This will have a major impact on your monthly payment amount.
Water & Sewer
On average, you should expect bet. $50-$80 per month, again depending on usage. Have a large pie-lot that needs watering? Got 3 teenage boys that take lots of hot showers? Or are you an empty nester with very few watering needs?
All these things affect your water bill as a home owner. This is another category which is normally covered by the condo fees, so condo owners already pay for this service.
Emergency Fund
Unless your home is brand new and everything is still under warranty, a home owner is well advised to set aside a small emergency fund. In a condo, this is usually included and called a ‘Reserve Fund’.
If you are buying a house, this should be calculated as one of the potential cost to own a home in Winnipeg. How much money should an owner set aside> A good rule of thumb is to set aside 5 cents per square foot of your home. So a house which is 1,200 square feet would dictate a monthly deposit into a savings account of $60.00.
Alternatively, you could tie the amount to your gross income, for example a percentage of your bi-weekly pay-check. No matter how you calculate your contributions, putting money aside for unexpected repair costs will help you avoid headaches in the long run.
What other cost to own a home are there?
Furniture and appliances, lawn care, life insurance and other ongoing costs should be on your budget lists. These are costs your real estate agent might not have an opportunity to discuss with you. But especially first-time buyers are well advised to keep these in mind.
I hope that this does not discourage you from a home purchase, as there are many benefits to home ownership that far outweigh the costs.
Also, if you’re looking to buy your first home, don’t forget that condominiums offer a great opportunity to get into the real estate market. There are many reasons why a condo might be right for you. The condo fees are an often maligned and mis-understood issue.
The fact is that condo fees often replace, or reduce, some of the usual home owner costs listed above. Condo fees are not as scary or wasteful as you might have heard.
Also check: Closing Costs when buying a house or condo in Winnipeg
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Also check: Closing Costs when buying a house or condo in Winnipeg
FAQ: How much does it cost to buy a home in Canada?
Using CMHC (Canada Mortgage & Housing Corp) anyone can buy a home in Canada with just 5% down payment. (To avoid CMHC fees, they would need 20% down)
So a $350,000 house would require a down payment of $17,500, which must come in the form of a cash down payment OR via a GIFT from parents or other sources.
In addition to the down payment, home buyers needs to budget for closing costs, which include legal fees, property taxes, land titles taxes, etc. These are often tied to home’s value and add up to an estimated 2.5% to 3% of price of the home.
So, a buyer needs to have approx. 7.5% to 8% of the total cost of the house (or condo) in savings (or GIFT) when embarking on the journey to purchase a home.
To reduce your spending on heating ang cooling home, consider installing a smart thermostat. For every degree you turn down your thermostat this winter, you’ll use up to 3 percent less heating energy. However, please don’t overdo it. If you live in an area with extremely cold temperatures, too low temperatures in your home may cause pipes to freeze.
Thanks for sharing this! To improve home insulation and increase home’s energy efficiency, consider caulking window trim and using weatherstripping to reduce air leaks. If windows in your home are old, think about replacing them with energy-efficient units. After all, air leaks from bad quality windows can account for 30 percent of your home’s energy bill.
In areas with extreme temperatures in winter and summer, weather resistant windows can be an excellent solution.
You can drastically lower your spending by improving your home’s energy efficiency. Here are lots of ways to do this: https://happyhiller.com/tips-tricks/tips-save-money-utility-bills/. Please remember that using less energy is not about discomfort. It’s rather about conscious consumption..
Thanks for the info.. I’ll pass this along to my sister who is looking for a house.
Some of these costs are included in condo fees. Thats why I bought a condo. But great article.
Absolutely agree….. owning a home is better than renting
Thank you….. even with these costs, owning the home is the best
Very helpful. I appreciate knowing the true cost of home ownership.
Robyn Kastner
Marven Fernandez Avaricio