Beyond Purchase Price, understanding the true costs of purchasing a home
There are two types of costs in buying a home - the initial amount you will
need for your purchase and the ongoing costs of paying back your mortgage along
with monthly operating costs. The largest one-time cost is the down payment.
It usually represents 5-25% of the total price of the property.
Typical One-time Expenses:
- Mortgage application and appraisal fee
- Property inspection (optional), due at time of inspection
- Legal fees, due at the time of closing
- Legal disbursements, due at the time of closing
- Title insurance which protects you against loss resulting from
title defects and defects that would have been revealed by an
up-to-date survey/real property report or building location
certificate. In most cases, title insurance can eliminate the need for
costly title and off-title searches.
- Land transfer, deed tax or property purchase tax due at the time of
closing. Note that there is a rebate available to first time home buyers
who buy new construction homes or resale properties.
- Mortgage interest adjustment (if applicable), due at the time of
- Home and property insurance, at closing and ongoing
- Moving expenses, due on the date of move
- High ratio mortgage insurance if you have less than 25% of the
purchase price for your down payment, plus related provincial sales
Typical Monthly Expenses:
- Mortgage payments
- Maintenance (this could be condominium fees, or allocated maintenance fees)
- Property and content insurance
- Property taxes