Home Buying Costs

In preparing to buy your first home, you need to budget for expenses that will be incurred up-front in the process including:

This is part of your down payment and must be paid when you make an Offer to Purchase. Deposits are usually around 1-2% of the purchase price depending on a few factors. Sellers may request that the deposit be increased once all conditions have been satisfied.

Down Payment
At least 5% of the purchase price is usually required for a high-ratio mortgage and at least 20% of the purchase price is usually required for a conventional mortgage. A conventional mortgage does not necessarily require mortgage insurance to be applied through CHMC or Genworth.

CMHC Mortgage Loan Insurance
The amount of the premium varies and can range between 0.65% and 2.75% depending upon how much of the purchase price/home value is financed with a mortgage loan.

Appraisal Fee
Your mortgage lender may require the property to be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $350 and $450 and must be paid when you contract for those services. Most banks will waive this fee in return for your mortgage business, which is another reason to shop around.

Home Inspection Fee
A satisfactory home inspection is often an important condition of the Offer to Purchase. A home inspection is a report on the condition of the home and generally ranges around $400-500, depending on the complexities of the inspection. Larger or older homes may cost more, especially if there is any suspicion of latent defects.

Land Title Transfer
You have to pay this upon closing, which will be included in your lawyer's closing fees. The cost is based on the value of the home and is $3 for every $1000 of home value.

Prepaid Property Taxes to Reimburse the Vendor (if any)
Depending on how the seller paid their taxes, you may have to reimburse them for the taxes that they have paid from the date you take possession. If they have paid the taxes for the entire year, you may have to reimburse the sellers for a large portion of the yearly taxes.

Home Insurance
The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing the structure of your home and its contents. Property insurance must be in place on closing day.

Survey or Real Property Report
The mortgage lender may ask for an up-to-date survey or real property report prior to finalizing the mortgage loan. If the seller does not have one or does not agree to get one, you will have to pay for it yourself or rely on Title Insurance.

Title Insurance
Title insurance covers loss caused by defects of the title to the property and may be recommended by your lawyer.

Legal Fees and Disbursements
Must be paid upon closing and costs a minimum of $500 (but usually around $1000) plus GST. Your lawyer will also bill you for any disbursements they incur such as land title searches to check on the legal status of the purchased property.

Costs After Possession

  • Appliances (if not included)
  • Yard maintenance tools
  • Window treatments (if not included)
  • Decorating materials - paint, flooring, tools, etc.
  • Moving expenses
  • Service hook-up fees
  • Condo Fees (if applicable)
  • Repairs, reno's, upgrades
  • Household items (first time buyers often forget about the little things such as garbage cans and shower curtains)


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