How Much Should You Save Each Year for Maintenance on Your Home?

When you settle into your new home after closing day, a whole new journey begins. You’ll have the chance to turn your property into a true home. Along the way, you’ll make plenty of wonderful memories. But it is vital to be ready for the costs that come with homeownership. If you are or plan to become a first-time homebuyer, here are some tips that can help you keep your new home running smoothly.

You already know about your mortgage costs, plus electricity, heating, and other utilities. But you also need to prepare for the unexpected. Things will break down or need to be repaired or replaced over time. All the problems that were previously handled by a landlord are now up to you.

This can be intimidating. Luckily, things don’t usually break down all at once!

Still, it's important to start saving for home maintenance from the start. If you’ve just moved into your home, that could mean putting off renovations until later. It is always better to have some money saved for emergencies. The question is: how much do you need to save?

How Important is a Maintenance Budget?

Very important. According to a 2025 survey, 81% of homeowners say the costs of homeownership are higher than expected, and nearly half (46%) weren't able to accurately estimate the cost of repairs and improvements before buying. Plan ahead to avoid financial stress and protect your investment.

How Much Should I Save for Maintenance?

Try to save 1% to 4% of your home’s value every year. For a $120,000 home, that would be $1,200-$4,800. (That 1% doesn’t include closing costs or other fees.)

With a $120,000 home, setting aside $100 - $400 per month gives you a cushion for both routine maintenance and unexpected repairs. Most months , you will only need a small portion of what you saved. But if your heating system fails in the winter you might end up spending $3,000 - $7,500 on one expense. 

How Long Will My Home’s Parts Last? 

It all depends on quality and materials, but here are some estimates:

• Roof with asphalt shingles: 15-30 years
• Furnace: 15-25years
• Central air conditioner: 10-15 years
• Tank-style water heater: 8-12 years
• Tankless water heater: 20+ years
• Windows: 20-40 years (vinyl/fiberglass last longest)

When you bought your home, you probably got a home inspection, letting you know if there are major problems with the roof, electric, or sewer system. Sometimes, the home can’t be sold until issues are fixed.

With a clean home inspection, you won’t be making significant changes right away. Over the life of an average 30-year mortgage, though, lots of repairs will come up. 

Pro tip: Ask the seller for maintenance records and the age of major systems before closing. This information helps you prioritize your savings and plan for upcoming replacements. If the roof is 20 years old, start setting aside extra funds now. If the furnace was just replaced, you likely have 15+ years before needing a new one.

How Much Would It Cost to Replace Parts?

Some average replacement costs include:

• Asphalt roof: $6,000 - $12,000
• Wooden deck: $25-$50 per square foot (complete installation)
• Furnace: $2,800-$7,500
• Central air conditioning: $4,000-$8,000
• Tank-style water heater:$600-$2,500
• Tankless water heater: $1,400-$5,600
• Windows: $300-$2,500 each

Knowing the age of each part of your home helps prioritize your savings. It’s important to get this information from the seller before closing. It might be impossible to find otherwise. An asphalt roof with 20 years of service might need replacement at any time, while a brand new furnace can last for years.

Important note: These costs can vary significantly based on your location, installation complexity, and material quality. In 2025, material and labor costs have increased approximately 5-7% annually in recent years. Budget 10-20% above these estimates for unexpected complications.

How Can I Reduce Long-Term Costs?

Regular preventative maintenance can extend the life of major systems and prevent expensive emergency repairs:

• Change HVAC filters every three months: Extends furnace and AC lifespan by years
• Flush water heaters annually: Removes sediment that reduces efficiency and causes early failure
• Clean gutters twice yearly:- Prevents roof damage and foundation issues
• Seal and stain wooden decks every two to three years: Prevents rot and extends deck life by decades
• Inspect and maintain caulking around windows: Prevents drafts and water damage

A $200 annual maintenance budget can save you thousands in premature replacements.

When Should I Repair vs. Replace?

Here's a helpful rule of thumb, the 50% Rule: If a repair costs more than 50% of a replacement AND the item is past 50% of its expected lifespan, replacement is usually the better investment.

Examples:

• Your 12-year-old furnace (expected lifespan: 20 years) needs a $1,500 repair, and a new furnace costs $4,500. Since the repair is 33% of replacement cost and the unit is 60% through its life, repair makes sense.
• Your 12-year-old air conditioner (expected lifespan: 12 years) needs a $2,000 repair, and a new AC costs $5,000. The repair is 40% of replacement cost, but the unit has reached its expected lifespan. Replace to get a more efficient system with a warranty.

The best way to free up funds for home repairs is to start with a low-cost mortgage. A low fixed interest rate can save you thousands of dollars over the 30-year life of your home mortgage—money you can redirect to your maintenance fund instead of interest payments.

Twin Cities Habitat for Humanity’s TruePath Mortgage is an affordable solution for first-time homebuyers. Contact us today or download your First-Time Homebuyer Guide to get started or learn more.