Home Ownership Costs beyond Principal and Interest

Buyers, especially first-time homebuyers, are always interested in finding out how much it costs to own a home. A point of reference is usually the rent that they currently pay. More specifically buyers want to know how much it will cost per month to own a home as compared to how much they are currently paying for rent. Once it is clear in their minds how much this figure approximately is then they are able to make a decision or a commitment to start the home buying process more easily.

The recurring or continuing costs associated with home ownership is called CARRYING COST.  It is different from CLOSING COST, the fees and other expenses you pay to and through your lawyer on the closing date of your home purchase.

What are these carrying costs? Below is a list:

1. PRINCIPAL and INTEREST payments on your mortgage. Most buyers are aware of this and sometimes only this!

2. CMHC MORTGAGE INSURANCE. If your downpayment is less than 20% of the purchase price you will be required to pay this. The amount is usually added on to your mortgage. Visit this link to find out how much it costs.

3. MONTHLY PROPERTY TAXES. For Toronto it currently is: Property Assessed value * 0.8305702% /12 months


5. FIRE INSURANCE. Required by the banks or institutions that give you the mortgage. Condo maintenance fees will usually cover this.

6. MAINTENANCE FEES. Usually for condos. Freehold properties, like a group of townhomes whose owners agreed to have contracts for another party to do some maintenance(snow removal or garbage pick-up), will also have this.

7. MORTGAGE INSURANCE/LIFE INSURANCE. This is different from CMHC insurance which protects the lender in the event of borrower default. This insurance protects  YOU, the buyer/s, in case of death or disablity. Depending on the coverage you buy your mortgae could be paid off in full or part in case of death or disability of an owner of the house. This is optional.

8. HOME CONTENT/DAMAGE INSURANCE. Insurance that will cover losses due to theft or damages to the house. You can usually get a better deal if this is purchased from the same institution that insures your vehicles. This is also optional.

9. ONGOING MAINTENANCE. Repairs, upgrades, etc. I will share with you an article on this in my next post.


I hope this helps you clarify a lot of things. Who can help you with the figures? A mortgage broker, insurance agent, internet resources and calculators are some resources. Of course I am also available to help you out!









Daniel Braganza

Daniel Braganza

Sales Representative
CENTURY 21 King's Quay Real Estate Inc., Brokerage*
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