Even Homeowners With Paid Off Homes Are Having a Hard Time Paying the Bills (Video)

In this 14 November 2026 published video, host Michael Bordenaro reports that roughly 5.5 million mortgage-free homeowners in the U.S. spend at least 30 percent of their household income on housing costs, with 2.7 million spending half or more. Eliminating a monthly mortgage payment removes principal and interest, yet average non-mortgage homeownership costs still reach $21,486 per year nationwide. 

According to a Washington Post analysis of Census Bureau and Insurify data, four core expenses continue to climb long after the bank lien is gone. Homeowners spend an average of $7,374 annually on upkeep. Aging roofs, failing HVAC systems, and plumbing repairs require large upfront cash reserves that home equity cannot directly pay. Electricity, heating, water, and trash services average $5,649 per year. Taxes average $4,427 annually nationwide. Harvard’s 2026 State of the Nation’s Housing report found that U.S. property taxes climbed 31 percent between 2019 and 2025 as home valuations surged. Standard insurance policies average $3,012 per year, with extra flood coverage adding over $1,000 on average. Average monthly premiums jumped 72 percent between 2019 and 2025 due to severe weather losses and higher rebuild costs. 

Many owners pay off their 30-year loans right as they transition from earned wages to Social Security or fixed pensions. Modest cost-of-living adjustments often fail to keep pace with a single tax reassessment or insurance renewal. High-Cost States. In 22 states, non-mortgage ownership costs exceed $20,000 a year. In five states, including California and Hawaii, those ongoing bills top $30,000 annually. While paying a mortgage, lenders collect 1/12th of annual taxes and insurance each month. Once paid off, owners must manage large lump-sum bills on their own, risking late fees or tax liens if cash isn’t set aside. 

If you or someone you know is feeling squeezed by the carrying costs of a paid-off home, several steps can free up monthly cash flow. Review your county’s valuation notice for errors in square footage or comparable sales. Research indicates that property tax appeals warrant reductions in 5 percent to 25 percent of cases, saving homeowners $500 to $2,500 per year. Check with your local tax assessor to ensure you have filed for a primary residence homestead exemption, senior tax freeze, or circuit-breaker credit. Most jurisdictions require you to apply directly rather than granting relief automatically. Compare quotes across multiple carriers before every renewal with matched coverage limits. Raising your deductible or bundling policies can offset rate hikes, though you should verify that you can cover the higher deductible in an emergency. Set up automatic monthly transfers into a dedicated high-yield savings account to cover annual tax bills, insurance premiums, and a maintenance reserve of 1 percent to 2 percent of the home’s value per year. Income-eligible seniors can apply for federal weatherization assistance or USDA Section 504 Home Repair grants to cover essential fixes. If carrying costs remain unsustainable, downsizing to a smaller home or condo can unlock trapped equity while cutting taxes, utilities, and upkeep. 

https://youtu.be/eDluGI4j4sM