What does it cost to buy and own a home in Canada?

Buying a home is exciting, but no one ever said it’s cheap. There’s your mortgage payment, of course. But there are also several one-time costs and ongoing expenses you need to plan for.

When you’re out looking at homes, it’s important to remember that the purchase price is not the final price you pay. If you’re aware of additional one-time and ongoing costs and plan for them, you’ll be in good shape when buying your home.

There are a number of one-time costs you may have to pay before you can unpack and settle into your new home. These can add up quickly. For example, as a general rule, you should plan to save 4% of the purchase price of your home for closing costs.

• Appraisal fees
  Depending on the type of property you’re purchasing; your lender may require an independent evaluation to determine the property’s value.
• Home inspection fees
  If you’re buying an older home, you may want to consider a home inspection to identify any major structural problems with the home. This may also be requested by your lender.
• Land transfer tax 
  Most neighbourhoods require you to pay a one-time land transfer tax when you take ownership of a property. The amount of tax is usually based on the home’s purchase price. Ask your real estate agent for an estimate.
• Legal fees
  You’ll need the services of a lawyer or notary during the purchase process. Fees vary, so ask for an estimate upfront.
• Title insurance 
  Title insurance protects you if someone challenges the ownership of your property. The cost varies, but it could add hundreds of dollars to your closing costs.

• Down payment
  A down payment is amount of the money you pay towards the purchase of your new home. The difference between the purchase price and your down payment is the amount of your mortgage loan.
• Mortgage default insurance
  If you have less than 20% for your down payment, you’ll be required to purchase mortgage default insurance. This protects the lenders in case you fail to make your payments. You can make a one-time payment or add the cost to your mortgage.
• Moving expenses
  Moving your belongings can be expensive – especially if you have big items like furniture and appliances to bring to your new home. You could cut costs by asking family and friends to help.
• Upgrade charges 
  If you’re buying a newly constructed home and have changed elements of its design, your builder will charge you for each change. You can pay these costs in cash or you may be able to add them onto your mortgage.
• Utility set-up costs
  Some utility companies, such as hydro, electricity, gas, cable and internet, charge a fee when you set up an account for the first time or change your address. Check with your local service providers ahead of time to determine how much you need to budget for utility set-up

• Routine costs
  These are the costs that maintain your lifestyle – for example, groceries and clothing. You can use a budget tool to help keep track of your expenses and identify areas where you may be able to cut back. The lower your spending, the higher your savings.
• Renovations
  If you plan to upgrade your new home, you’ll need to put money aside to pay for the renovations. You could also take out a loan but, if you do, the monthly payment must be added to your budget.
• Emergency savings fund
  This is your “just in case” money used to cover the cost of unplanned expenses. It’s important for everyone to have emergency savings, and setting aside a little money each month can help you build your fund.

Taking time to estimate your one-time and ongoing costs before you buy your new home means you’re less likely to face surprises after you move in. And that means you’ll get to enjoy your new home, instead of worrying about how to pay for it.