10 Home Purchase Closing Costs

Posted by Kent Braaten on Friday, January 4th, 2019 at 8:29am.


The total cost of buying a house goes beyond just its price.  Your Real Estate Agent or Lawyer will be able to tell you exactly how much you’ll have to pay.

LAND TRANSFER TAX | .5-2% of value
When a home changes hands, many provinces and a few municipalities, charge a property transfer tax, or title transfer fee.  It can add thousands to your purchase price. (First time home buyers qualify for rebates or exemptions in some provinces)

APPRAISAL FEE | around $500
Your lender may ask you to have a home appraised to confirm its market value.  Fees vary depending on a property’s value and complexity.

LEGAL FEES | $500-$800
A lawyer or notary will help protect your interest by reviewing your purchase agreement, searching the property titles, and ensuring that all documents are completed properly.

An inspection can help make you aware of issues related to a house’s structure and systems; such as plumbing electrical and recommended or necessary repairs.

HOME/FIRE INSURANCE | $1000-$2000/year
Your lender will require proof that the property is insured in case of fire and/or other damage. Insurance costs vary depending on the coverage needed.

Title insurance can safeguard you against fraud and problems with your property title or survey.

If you’re buying a brand new home, be prepared to settle any items not quoted in the original price; including upgrades, paving or landscaping fees.  New home are also subject to 5% GST or 13% HST, (although this is often included in your purchase price). A general rebate reduces the GST, or the federal part of the HST to about 3.5% for homes valued at $350,000 or less.

Is the seller has paid property taxes, water bills, or utilities in advance, you’ll need to reimburse these at closing.  Although this can add hundreds to your up-front costs, these bills will be paid for your first months in your new home!

If you have less than a 20% down payment, your lender will require that you obtain mortgage default insurance.  You can roll the cost into your mortgage payments, although the PST is due at closing. For example if your mortgage insurance is $5,000 and the PST is 6%, you’ll pay $300.

Before the big day, budget for all of those last minute things: $100 or more to rent a truck, or a few hundred for professional movers,  $50 to $60 for cleaning supplies and a lock-smith to re-key your locks.

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