You’ve always been one to dream big — and of course, that applies to your home. Who doesn’t want a little more space to spread out? But with a bigger home comes more responsibility and bigger costs, some of which may not be obvious right out of the gate. Let us break down the hidden costs of buying a bigger house so you can be totally sure it’s the right next step for you.
Average One-Time Costs of Buying a New House
- Average purchase price per square foot: $84
- Closing costs: 3.5% of the price of the home
- Additional furnishings for a new home: average $2,000-$4,000
These numbers represent just the beginning: the determining factors of how much your mortgage will need to be in the long run, plus the cost of buying a little additional furniture to fill the new space. If you plan to do a significant overhaul of your home furnishings, that number will increase significantly.
Average Annual Costs of Home Ownership
- Energy costs per year: $1.03 per square foot
- Yearly maintenance: Average of 1% of the home’s price
- Property taxes: 1.3% of home price
These numbers can range depending on the location of your home. Some states and cities have higher taxes, and if you live in a climate with a wide range of extreme temperatures, a larger home could mean significantly higher bills for air conditioning or heat. You’re also moving into a home with unknown maintenance needs. You probably know where you stand with your current home on big-ticket items like the furnace, roof, and water heater — a new home could present new (surprise!) maintenance issues like a leak in the foundation or appliance replacements. Keep this in mind.
Average Cost of a Bigger House per 500 square feet
- $42,000 in initial purchase costs
- $1,470 in closing costs
- $8,400 in furnishing
- $24,148 in mortgage interest
- $16,506 in property taxes
- $15,450 in energy costs
- $12,600 in maintenance
- Total: $120,574 per 500 square feet
What’s the cost of buying a bigger house? Breaking it down this way might be a bit of a reality check. Add the cost of moving, and this transition adds up to significantly more than just a slight increase in your mortgage payments. For some, this might account for hundreds of thousands of dollars that might otherwise be invested, put into your retirement fund, or used to take that vacation. Before your big-dreaming visions send your bank accounts on a downward spiral, be certain you’re absolutely clear about the hidden costs of buying a bigger home. We don’t mean to rain on your vision, we’re just really practical, straight-forward people. Like our moving estimates.
Thinking you might just sell your house and rent instead? Check out our breakdown: should you buy or rent?