I feel like the catchphrase of a first-time home-buyer is “I had no idea that was A Thing,” so I’ve teamed up with BMO to break down some of the key things you need to know going into the whole buying-a-house process over the next few weeks.

Of all the things you need to plan for when it comes to money, building a budget for a new house is so high up there, friends.

I mean, realistically, this is the biggest financial decision of your life, and will represent a good chunk of your monthly spending for a looooong time. (25 years, give or take a few based on how quickly you want to tackle that mortgage.)

So before you fall in love with a dream house, and before you’re tempted by the absolute maximum mortgage you could technically qualify for, it’s important to plan out a budget for your new house. Specifically, you’ll want to build a budget that includes your spending on other things, like having a dog, travelling, maybe babies, and everything else you’d like to not give up for 25 years.

Because realistically, that’s too long to give up avocado toast, yaknow?

I went back to our trusty BMO mortgage expert, Jared Ksenica (Regional Vice President of Specialized Sales for the Greater Toronto Division at BMO, but you totally knew that by now) with some questions to help figure out how to build a budget that works for your new place – including all the line items none of us ever remember to include in our daydreams about quartz countertops.

Granite is clearly the inferior countertop, which you would know if you watched as much HGTV as I have.

Instead of focusing on questions, Jared and I decided that this time, it’d be more helpful to put together a list of all the items you probably want to estimate and include in your new-house budget plan. So without further ado, here’s everything that really needs its own row in your very own house-planning budget.

Housing expenses (30% to 35% of your take-home income)

And when I say “housing expenses,” there are more line items than you currently have if you’re renting. When I was talking to Jared, he brought up a few key points that you likely aren’t paying if you’re a renter currently.

“You should include property taxes, condo fees, cable, heat, hydro and phone (some older buildings may have heat included in the condo fees and this would be confirmed at the time of closing),” advised Jared.

Even beyond just those expenses, we got into the nitty-gritty details of exactly which costs need a line item in your monthly new-house budget, so without further ado…

Mortgage

This is the big kahuna, and thanks to the widespread availability of mortgage calculators online, I bet you already have a ballpark number in mind based on your house budget, your down payment, and the interest rate you think you can score. (If you don’t, you can calculate your mortgage payments on BMO’s website here.)

But unlike rent payments, your mortgage payment is just the beginning.

Hydro, Water and Gas

You’ll also need to cover all of your utilities, which includes all of the above items (which in my spreadsheet get their own lines, because I’m an obsessive, but you could totally lump them together as utilities.)

Jared’s got some advice on how to budget for them beyond just guessing-and-checking, too. “You can contact each utility provider to determine what the going rates are to get an approximation. You may also be able to get historical billings from each utility provider,” says Jared, which is news to me because I just accepted what the old owners estimated the monthly costs were.

Still more accurate than hoping for the best, but man, who knew you could contact the utility providers directly?

Property taxes

A lot of mortgage providers will offer to handle your property taxes for you by bundling it into your monthly payments, and remitting the taxes for you. If that’s the case, you can add it into your monthly mortgage number, but it’s good to stare down the monthly total first.

The specific amount you pay in property tax will differ based on where you live, but can I just say, based on my own Ottawa experiences, it is not cheap. So even if you roll it into your mortgage payments for convenience, just make sure you know how much you’re actually paying.

Condo fees

There might be some overlap here, as Jared mentioned, but if you’re buying a condo, you need to account for the monthly condo fees in your budget. It might mean you can scale back on your utilities budget, or your maintenance budget, but these fees can run you multiple hundreds of dollars every month on top of everything else.

Always, always pay attention to condo fees.

Insurance (for the house)

Since I know you guys are responsible renters and totally have renter’s insurance for your stuff (riiiiight pals? Right? You have it? Good.) it won’t come as much of a surprise that you’ll need house insurance to insure your biggest thing of all: The house you live in.

As we covered last week in our breakdown of CMHC and closing costs, house insurance isn’t the same as CMHC insurance, and you’ll need a policy that you pay into that covers the value of your house in multiple worst-case scenarios, like floods and leaks and earthquakes and stuff.

Because again, this is the biggest purchase you’ll ever make! You 100% want it insured.

Insurance (for your life)

Speaking of insurance, if you’re buying the house with a partner, or you have dependents, you need life insurance.

If the house is your biggest purchase, your biggest asset is the future earnings you’re going to make in your life to help carry that purchase. Not to focus on the absolute wrong thing here, but if you die, it’s going to seriously suck for the person who’s left to manage that mortgage on their own.

Plus, they’re probably going to be so sad, pals! They bought a house with you, so they clearly think you’re pretty great. Get life insurance so that they have one less thing to worry about while they’re sad.

This could be its own 3,000 word post, so I’ll leave it at this: you need insurance, and unless you’ve got some crazy complex financials, term insurance will probably do the trick.

Emergency Savings

Things go wrong with houses. Like, all the time.

Do you even know how many things in a house can break?

It’s all of them, including your appliances, your pipes, your wires, your walls, your roof… everything. When you’re the owner, you need to be ready to fix things as they come up, and that includes paying for help and supplies as you need them. That’s why any solid house budget includes some money to save for said housing emergencies.

Everything else (65% to 70% of your income)

While I’m not going to sit here and prescribe everything you need to spend and save money on each month – that would be so weird, and you might not enjoy my dog-spending suggestions – you should build your budget under the assumption that you’ll be saving 10% of your pre-tax income for retirement, and that you’re setting aside some money to spend on fun stuff every month.

And while I’m pretty flexible on that 10%-for-retirement number for people who are struggling to balance their budgets (because I have been there!) I’m taking a stand: if you can afford the discretionary purchase of a house, you can afford to save 10% for retirement. So put it in your budget, boo.

If you’ve kept all those housing numbers under 35% of your total take-home income? It should be no problem to work in 10% to take care of future you.

TL;DR: Here’s your new-house budgeting numbers

If you scrolled past all the wordy details, here are the numbers you should include in your new-house budget.

• Housing expenses (30% to 35% of your income)
  • Mortgage
  • Utilities
  • Property Taxes
  • Condo Fees
  • Insurance (for the house)
  • Insurance (for your life)
  • Emergency savings
• Everything else (65% to 70% of your income)
  • 10% retirement savings, because you can afford it
  • 55% to 60% on everything else (bring on the lattes)

So the real takeaway here? That mortgage calculator definitely isn’t the only number you need to consider before buying your first home.

That’s a wrap on this collab with BMO, pals, and I hope you guys learned a few things about buying your first house (I know I did!) I want to say a huge giant thank you to BMO, Jared, and everyone I worked with on this series, and don’t worry – with my house closing coming up next week (!!!!) you know I’ve got more housing posts coming atchya soon.