Buying a new home is exciting—no doubt about it. But let’s be honest, it can also feel overwhelming. With so many decisions to make in a short amount of time, it’s easy to get caught up in the whirlwind and focus only on the down payment. While that’s a big part of the puzzle, it’s definitely not the whole picture.
There are a number of other expenses that come with buying a home, and being prepared for them can save you a lot of stress (and money) down the road. Let’s break it down:
1. Legal Fees
Every home purchase needs a lawyer to finalize things and register the mortgage. Legal fees typically start around $1,250 for a standard home purchase. If you’re selling a property at the same time, expect legal costs there too—for things like discharging your old mortgage and making sure your rights are protected.
2. GST
Buying a brand-new home? You’ll need to budget for GST. Good news: if you’re buying a previously owned home, GST doesn’t apply.
3. Home Inspections
Home inspections aren’t required, but they’re highly recommended. You’ll likely want to consider a few different types:
- General Home Inspection – A pro will go through the home top to bottom to spot any potential issues.
- Sewer Line Inspection – Especially worth it in older neighborhoods with big trees. Roots can sneak into sewer lines and cause big problems.
- Asbestos Inspection – Not super common anymore, but something to think about if you’re buying an older home.
Besides peace of mind, these inspections can give you negotiating power—whether that’s a price reduction or getting repairs done before you move in. Sometimes, the cost of needed repairs can even be rolled into your mortgage, as long as you get quotes in advance.
4. Mortgage Default Insurance
If you’re putting down less than 20%, you’ll need to pay mortgage default insurance (often called CMHC insurance). It’s a one-time cost based on the size of your down payment and is added to your mortgage amount—not something you pay out of pocket at closing.
5. Title Insurance
This is a one-time fee (usually around $305 + GST) collected by your lawyer. It often replaces the need for a real property report and protects against potential issues with the title of the property.
6. Property Taxes
If the current owner has already paid property taxes for the year, you may need to reimburse them for your share of the year. Your lawyer will calculate this for you.
7. Condo Fees
Buying a condo? You’ll likely have monthly condo fees. It’s also smart to have a professional review the condo documents to ensure the building is financially healthy and not at risk for a major cash call.
8. Utility Deposits
Depending on your credit history, some utility companies may require a deposit before hooking things up. It’s usually a small cost but worth being aware of.
9. Home Insurance
If you have a mortgage, you’re legally required to have home insurance in place before possession. Rates vary, so shop around. And remember: not all policies are created equal—look at what’s covered and what’s not.
10. Mortgage Penalty (if you’re selling)
If you’re selling your current home and can’t port your mortgage to your new place, you may have to pay a penalty for breaking your mortgage early. Call your lender to get the details—it can sometimes be a big chunk of change.
11. Appraisal
If you’re putting more than 20% down, or buying privately (without a Realtor), a lender might request an appraisal to confirm the property’s value. These typically cost $300–$500.
12. Moving Costs
Whether it’s renting a truck, hiring movers, or bribing your friends with pizza, moving doesn’t come free. Make sure to budget accordingly!
13. Personal Insurance
Once you own a home, it’s wise to protect that investment with life, disability, and critical illness insurance. It’s about making sure your loved ones—and your mortgage—are covered no matter what life throws your way.
14. Realtor Fees (if you’re selling)
If you’re selling your current home, your Realtor’s fee will be paid out of the sale proceeds by your lawyer. This is typically agreed upon when you list the property.
The Bottom Line
As you can see, buying a home involves more than just the down payment. But don’t let that scare you—being informed is half the battle. When you know what to expect, you can plan for these costs and avoid any last-minute surprises.
Have questions? I’m always happy to chat and help make sense of it all. Until next time!