How much your new home will ACTUALLY cost

by Dan DaCosta

Time to get serious. We’ve made it to the not-so-fun part – the actual cost of buying.

Sadly, there are several costs in addition to the purchase price.

Below are some of the most common expenses associated with buying a home in Ontario.

DOWN PAYMENT
Typically, buyers need to make a down payment on a home.
In Canada, a minimum of 5% is required.

MORTGAGE LOAN INSURANCE
If your down payment is less than 20% of the purchase price, you
may be required to obtain mortgage insurance. This cost is usually
rolled into your mortgage payment.

APPRAISAL FEE
Your lender may require an appraisal of the property to determine its
market value. In most cases this is paid by the borrower (you).

LAND TRANSFER TAX
This tax is payable by the buyer, and is based on the purchase price
of the property. First time home buyers may be eligible for a rebate.

HOME INSPECTION
While not mandatory, many buyers choose to have a home
inspection performed to identify any issues with the property. This
is generally at the expense of the buyer.

LEGAL FEES & DISBURSEMENTS
You will need a lawyer or notary to handle the legal aspects of the
home purchase. Legal fees and disbursements cover the costs of
their services.

TITLE INSURANCE
Title insurance protects you, the buyer, against any potential issues
with the title of the property. This cost varies, but is a one time
premium paid at closing.

UTILITY & SERVICE HOOKUPS
There may be costs associated with connecting utilities and other
services to your new home.

PROPERTY TAX ADJUSTMENTS
It is the responsibility of the buyer to reimburse the seller for any
prepaid property tax that overlaps with the possession date.

MOVING COSTS
Factor in the cost of hiring a moving company, or renting a truck to
move your belongings.

Let’s breakdown an example of closing costs for a home with a purchase price of $500,000.
(Please note that these figures are approximations, and actual costs may vary).

Purchase Price: $500,000

Down Payment: 5% of $500,000 = $25,000

Mortgage Loan Insurance (less than 20% down payment): 3.5% of ($500,000 – $25,000) = $16,275 **premiums often range between 2.8% – 4%**

Land Transfer Tax: Ontario has a tiered system for LTT
– 1st $55,000: 0.5% = $275
– $55,000 – $250,000: 1.0% = $1,950
– $250,000 – $400,000: 1.5% = $2,250
– Over $400,000: 2.0% = $2,000
Total Land Transfer Tax: $275 + $1,950 + $2,250 + $2,000 = $6,475

Legal Fees & Disbursements: $2,000
**this price varies greatly – estimate between $1,500 – $2,500**

Title Insurance: $400
**this price varies between $300 – $500**

Home Inspection: $500
**generally costs between $400 – $600**

Appraisal Fee: $400
**can range from $300 – $500**

Property Tax Adjustment: $500
**this is dependent on what the previous owner has paid, when you buy, etc.**

Utility & Service Hookups: $300
**dependent on what services are offered**

Moving Costs: $1,000

Grand Total Estimated Closing Costs: $52,850

Please keep in mind that these are rough estimates (and actual costs will vary), but essential to budget for in addition to the purchase price to ensure a smooth home buying process.
We will get accurate figures based on your specific circumstances. Additionally, tax rates and
regulations are constantly changing, so it’s advisable to check for any updates.

As your Realtor, I will be able to give you an accurate estimate based on your specific situation.