Capital expense
A large, infrequent cost to replace or upgrade a major home system — as opposed to routine maintenance.
A capital expense (or capital expenditure) is the big, one-off money you spend to replace or substantially upgrade a long-lived part of your home — a new roof, furnace, central AC, water heater, or repipe. It's different from a maintenance expense, which is the small, recurring cost of keeping those systems running: filters, flushes, tune-ups, and minor repairs. The distinction matters for budgeting, because the two are funded differently. Routine maintenance comes out of an annual budget (often estimated with the [1% rule](/guides/home-maintenance-budget-calculator) or a per-square-foot figure), while capital expenses are best funded by a [sinking fund](/glossary/sinking-fund) you build over the years of a system's [service life](/glossary/service-life) so the replacement is a planned withdrawal, not a financial shock. Putting off a needed capital expense is exactly how [deferred maintenance](/glossary/deferred-maintenance) accumulates.