Can you afford your house in five years?

Photo by Ian MacDonald | Unsplash.com

By Maurie Backman
Posted on October 13, 2025

Homeowners are often advised to try to pay off their mortgages ahead of retirement. That way, they’ll have one less expense to contend with on a fixed income.

But while shedding a mortgage payment could free up room in your budget as a retiree, that doesn’t mean you won’t have other homeowner expenses to deal with, like property taxes, maintenance and insurance.

Even with a paid-off home, your costs of ownership could rise in retirement, causing financial stress and making it difficult to keep up. It’s important to understand the costs of continuing to own a house — and to take steps to protect yourself financially.

Appeal your property taxes

In August, the Federal Housing House Price Index measured a 2.9% increase in U.S. home values on a year-over-year basis. When home values rise, property tax bills tend to follow suit, which can be a huge problem for retirees on a budget.

That’s why Colton Pace, co-founder and CEO at Ownwell, a property tax appeal service, said older homeowners need to be informed about property tax relief programs.

“In most states, people 60 or 65 and older can lower their property taxes through homestead exemptions and property tax freeze programs,” he said.

If you’re older, it pays to check with your state’s Department of Revenue or Division of Taxation to see what programs you might qualify for. [Ed. Note: D.C., Maryland and several Northern Virginia locales offer a senior citizen homestead discount of 50%, and your county may offer additional discounts.]

And remember, even if you don’t qualify for a property tax freeze, you can always appeal your property taxes on the basis that your home assessment is too high.

Pace also points out that recent changes to the SALT (state and local tax) deduction could spell relief for some homeowners in high-tax states.

“Under the One Big Beautiful Bill Act, the SALT deduction cap was temporarily raised through 2029 to $40,000,” Pace explained. The previous limit was $10,000.

However, he warned, “You can only deduct property taxes if you itemize deductions on your federal tax return.”

There are also income limits associated with this new rule, though they’re quite high.

Homeowners in states that include Connecticut, New York, New Jersey, Massachusetts and California may benefit the most from this change, according to the Bipartisan Policy Center.

Shop for homeowners insurance

Homeowners insurance can be a huge expense for older homeowners — especially when rates keep going up. Bankrate reports that the average U.S. homeowners policy costs $2,408 per year for a $300,000 dwelling limit.

It’s important to shop around for a policy every year. You may be eligible for a discount based on your age or other factors.

Budget for maintenance

Home maintenance and repairs often push older homeowners to their breaking point.

State Farm says a good rule of thumb is to set aside 1% to 4% of your home’s value for maintenance each year.

If you want to make sure you’ll be able to afford to stay in your home long-term, you may want to create an emergency fund for home repairs and maintenance specifically.

Generally speaking, it’s a good idea for retirees to hold enough cash to cover one to two years of bills in case there’s a market event that sends portfolio values plummeting. Having dedicated funds for home-related costs takes some of the pressure off.

As Pace said, “All homes require upkeep, ranging from affordable fixes like deep cleaning to more expensive jobs like roof or foundation repairs. Ignoring urgent needs can lead to hazards and bigger bills down the road.”

A matter of priorities

As a retired homeowner, it’s best to expect that your costs will rise continuously from year to year. There are steps you can take to mitigate that, like looking into property tax programs, shopping for homeowners insurance annually, and having separate funds for maintenance and repairs.

But at the end of the day, if your home-related expenses are eating too heavily into your budget, there may come a point when downsizing makes sense.

Ultimately, you’ll need to ask yourself what takes priority: flexibility in your budget or staying put. There’s no right or wrong answer, but it pays to consider a move if the stress of keeping up with your home outweighs the benefits of living in it.