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How much does it cost to buy a home?
The cost of buying a home varies, but it is important to know all the additional costs and fees involved.
Buying a home is expensive but there can be good financial reasons to do it. For example, a home is an asset that can grow in value over time, and the rent won't keep going up.
Some of the costs of buying a home are:
- Down payment - A portion of the price of the home (usually between 5% and 25%) that you must pay before you can apply to a bank, trust or credit union for a loan (mortgage).
- Mortgage - A loan that is usually repaid in monthly installments (usually over 5-25 years). You must repay both the amount you borrow (principal) plus the charge for borrowing the money (interest).
- Land Transfer Tax - After land changes owners in Ontario, the new owner is required to pay a tax related to the value of the property. First-time homeowners can usually receive a refund on this tax.
- Property taxes - Taxes you must pay to your municipal government that help finance local services such as police and fire protection, garbage and snow removal, road maintenance and public health.
- Condominium fees- Condominium owners usually pay a monthly fee for general building maintenance.
- Renovation - Structural repairs required, especially with older homes.
- Maintenance - A cost that varies depending on the style, size and age of your home. You may also have to pay for unexpected repairs and replacements. Get more information about renovation and construction costs.
First-time buyers are often surprised by the hidden costs of home ownership. These costs include:
- Property appraisal fees
- Home inspection fees
- Service charges for connecting utilities
- Moving expenses
- Property insurance
The Canada Mortgage and Housing Corporation (CMHC) has resources that can help you determine if you can afford to buy a home.
For More Information
February 8, 2021