Second Home True Cost Calculator

A second home carries five recurring costs, and the annual total is simply their sum. At the sample figures used on this page (mortgage 12,000, local property tax 3,000, utilities 2,000, maintenance 3,000, insurance 800), the total is 20,800 a year, which the tool also expresses as a monthly, weekly and nightly figure. The nightly figure spreads the annual total across all 365 nights, so it compares like-for-like against short-stay rental rates only for a property in year-round use. For occasional use, the comparable figure is the annual total divided by the nights actually spent there; on a property used 40 nights a year that is roughly nine times the nightly row.

How the calculation works

Every input is an annual figure, and the five are added together with no weighting. The monthly, weekly and nightly rows then divide that total by 12, 52 and 365 respectively. Because the divisors differ in what they represent (52 weeks is 364 days, not 365), the weekly and nightly figures do not multiply back to precisely the same annual total. Each is an accurate division of the same number; they simply answer slightly different questions.

A second scenario: coastal property

Costs shift with location and property type rather than with anything in the formula. A coastal property might carry a higher local tax band, utilities that run through unoccupied months for heating and connectivity, and maintenance inflated by salt air and seasonal wear, with insurance higher again for periods when nobody is there. There is no usage input here, so the division by nights actually spent is a step done by hand.

What moves the number most

Nothing weights one input above another. The formula is a plain sum, so every input carries an identical marginal effect: adding one unit to any of the five adds exactly one unit to the total. What varies is the size of the figures entered: which line dominates depends entirely on the property, not on the calculation, and the Largest Cost Category row names it for the figures in front of you, listing every category involved when two or more are level. The What-If cards can look like they disagree, because they apply a percentage change rather than a fixed one: a 10% move on the largest line shifts the total far more than 10% of the smallest, even though a unit is a unit wherever it is added.

The formula behind this

The annual total is Mortgage + Local Property Tax + Utilities + Maintenance + Insurance, with each term entered as an annual figure. The derived rows divide that total: monthly by 12, weekly by 52, nightly by 365. All six symbols are set out in the formula box below.

What this doesn't capture

The figure excludes one-off costs (purchase fees, legal fees, surveys, renovation work), any rental income from letting the property, capital appreciation or depreciation, inflation on the five recurring costs, and the opportunity cost of capital deployed. Mortgage and insurance are included only if entered; setting those inputs to zero models outright ownership or self-insurance.

Common situations this figure is used for

• Comparing the total cost of ownership against renting a similar property for the same use
• Sizing whether a second home costs more or less than paying for commercial accommodation across a twelve-month period
• Assessing the effect of a maintenance spike (a heating system replacement, roof repairs) on the full-year picture
• Testing how much of the annual total a period of short-term letting would need to cover
• Breaking a lump annual figure into monthly, weekly and nightly equivalents

What this result does and does not show

What it shows: the combined annual cost across five major categories (mortgage, tax, utilities, maintenance, and insurance) from static inputs, together with the monthly, weekly and nightly equivalents and which category is largest.

What it does not show: seasonal swings within a year (the five inputs are treated as annual totals). Regional differences in tax or insurance rates compared with what has been entered. Tax relief or allowances that may reduce the local property tax bill. One-off costs such as legal fees, surveys, or renovation work. Liquidity costs at sale, including agent commissions. Personal tax circumstances, and investment growth forgone on capital tied up in the property. The figure is annual running cost only, not a wealth-impact projection.