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Closing Costs

Deposit

Depending on your location and the price of a home, you may need to put a deposit on a home as a security measure to ensure you don’t lose it to another interested buyer. If you are required to pay a deposit, it will become part of your down payment once you have purchased the home.

Down Payment

In Canada, the minimum amount you need to put down on a home is 5%. While this is realistic for most first time home buyers, having a down payment of 20% or more will help buyers avoid paying Mortgage Loan Insurance.

Land Transfer Tax

When you buy a home, you are required to pay a land transfer tax to the province upon closing. This tax is normally based on the amount paid for the land, as well as the remaining amount on any mortgage or debt assumed as part of the arrangement to buy the land. Cost will vary depending on your municipality, the size of the land and other factors.  Alberta, Saskatchewan, and parts of Nova Scotia do not have Land Transfer Tax at all, while other provinces use a tiered system.

Appraisal Fee

An appraisal will normally cost between $200 and $300 but can vary depending on your location. This will help prevent you from borrowing more than you need to, and will prevent lenders from giving you too much.

Home Inspection

A home inspection is a necessary step in your home buying process and will normally cost an average of $350 depending on the size, age, and condition of the home. This helps ensure there are no unexpected maintenance or home improvement costs upon purchasing the home.

Property Insurance

While property insurance is likely already something you have factored into your budget, it’s important to do your research and find a reasonable quote that will ensure you are covered should anything unexpected happen.

Mortgage Insurance

There is mortgage life insurance, which is designed to protect the repayment of a mortgage if anything were to happen to you. There is also mortgage loan insurance if your down payment is less than 20% of the total house cost. Premiums for this type of insurance range from 0.5% to 3% and increase if you are self employed.

Lawyer Fees 

The fee you will be charged by your lawyer will vary depending on the person representing you and must be paid upon closing. Ask your real estate agent for advice as they likely have a preferred trusted lawyer they can refer you to.

Title Insurance

Title insurance is a one-time-fee that provides protection from losses related to the properties title or ownership. Learn more about what it is in this blog post.

Property Taxes

The cost for property taxes is expressed as a dollar rate for every $1,000 estimated to be the market value of your property.

Maintenance and Energy Costs

Potentially your largest ongoing homeowner expense, these costs include lawn care/ yard work, professional services, additions/upgrades and the cost of keeping the house running year-round. You can use our monthly home budget planner to help map out all of these costs.

Moving Expenses

It’s easy to forget about the small things when moving, but it’s important to remember they can add up quickly! Consider the cost for phone, electricity, and other utility installations and don’t forget about movers, a moving truck and feeding your friends who are helping out!

Now that you have a better idea of the cost to buy a home, it’s time to hit the books to find out how much these services will cost in your area. Make a list, create a budget, and get started!

Getting ready to move into your new home!

During your closing period, keep track of utility and credit card bill, and any other regular mail or standing orders that you receive at your current address. Alert them of the address change in advance of your closing date. Also be sure to contact your doctor and dentist. For family and friends, you can easily send a change of address card via mail or email, but there are a few more steps to consider when it comes to informing government agencies.

Here are some packing tips: