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Gisele Cline

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Buying a home is an exciting process - whether its your first home, a move up home, or you're downsizing into a condo - or smaller home. You have determined how much home you can afford, you've saved your down payment, and together we've found the perfect home and your offer has been accepted. While the purchase price of your home is the largest cost you will encounter, there are other costs to prepare for when buying a home.

It's a good idea to budget some extra cash to cover the cost of obtaining a mortgage and "closing" your real estate transaction. Here are some of the extra cost items you should take into consideration when considering affordability:

Application Fee

Find out whether or not your lending institution charges to process your mortgage application.  In many cases, if you are dealing with a bank with which you have other accounts, they will waive the application fee.

Appraisal Fee

Mortgage lenders will usually loan a percentage of the home's purchase price or the market appraisal of the property, whichever is lower. The appraisal is either done by someone on the lender's staff or by an outside professional approved by the lender. The cost of the appraisal may be the responsibility of the home buyer or may sometimes be Waived in a competitive Mortgage climate.

(budget $275.00 if required)


HST - Blended GST & PST

Effective July 1st, 2010 The Province of Ontario implimented a harmonized  tax on services not previously subject to PST - including Real Estate commission, legal fees, Home Inspection fees etc. etc.  Please note that this tax will not be applied to the cost of resale homes but will apply to the cost of NEWLY CONSTRUCTED HOMES in excess of $400,000.  Please visit this link for a details.  

If you are buying a new (i.e. newly constructed) home, you will be required to pay Goods and Services Tax at the current rate (currently 13%) on the price of your home.  Please note that HST may also apply to homes which have been "substantially" renovated.  HST, however, does not apply to most resale homes (as noted above - HST does apply to the services around buying & selling however - like legal fees, real estate commissions, survey cost & homes inspection costs etc.).

Home Inspection Fee

Many home buyers choose to have a home inspection done prior to finalizing their offer to purchase. Some lenders require a professional home inspection as well.   (Budget min. $425 - $500+ dependent on size & complexity of property i.e. multiple kitchens etc.)

Termite Inspection

A separate Termite Inspection should be carried out by a firm specializing in termite inspections especially in areas where termites are know to be a problem in the past.  (Budget $250 - $300.+)


There are several types of insurance that may be required when buying your home. If you are arranging a "high-ratio" mortgage (usually where you have less than 20% down payment) you will need to purchase Mortgage Insurance. (see my website for CMHC rate scale).  Also,   Mortgage lenders require you to carry fire and extended coverage insurance that exceeds the amount of the outstanding balance of the buildings.  You will likely wish to carry Home Insurance on your property in any event.  Again, Title Insurance may be desired and you may also wish to possess additional Life Insurance so that the Mortgage can be paid out at the time of death of the Mortgagor (Owner).

Land Survey Fee

Lenders require a lot plan or survey of the property you intend to buy. On properties located in subdivisions in urban areas, lenders will often accept an existing survey, depending on when it was done and whether it shows all existing structures & fence lines etc. However, if there is no existing survey, you may be required to obtain one.  (Today there is usually no requirement by the Lender for a new Land Survey if the Buyer is getting Title Insurance.  If however a Survey is required budget $1500 - $3000. + depending on size of property, complexity, and location)

Land Transfer Tax

This tax is payable by anyone who purchases property in Ontario.   Effective in 2008 The City of Toronto is charging an additional Land Transfer Tax almost comparable to the Provincial L.T. tax.  Please use this Land Transfer Tax calculator from the Toronto Real Estate Board to estimate your Land Transfer Tax costs.  

Legal Fees

You do require a Lawyer to close most Real Estate transactions.  Your Lawyers fees will include - the cost of the Title search, preparing the Title documents, registering the Mortgage on Title, and other "disbursements" like photo copying, couriers charges etc. 

Lawyers' fees are quite variable depending on the complexity of the transaction.  These fees will likely be higher where 2 transactions are involved - a sale & a purchase.  Also their fees may include the cost of Title Insurance (which in itself will be approx. $350. - $400.)   Advice - do not base your selection of a Lawyer strictly on price.

Maintenance and Utility Costs
Be sure to budget for heating, electricity, water and any immediate renovations you may have planned. It's a good idea to put aside any spare cash and contribute regularly to a "Contingency Fund"   (maintenance fund) so you will be prepared for any repairs or upgrades you need to make along the way.

Moving Costs

These vary widely based on the volume & complexity of goods to be moved, the level of service and distance of the move.  Above all - hire reputable Movers and avoid additional stresses on moving day. 

Other Costs

You will likely have to make property tax adjustments (realty taxes paid in advance are apportioned to the day of closing) and interest adjustments on utility bills, heating oil etc. Ask for an explanation of these additional costs so you have no surprises on closing day.

* Note that any costs for services quoted in the above are estimations only and that fees for services vary widely and are subject to change & market availability.  The fees for any services contemplated should therefore always be confirmed by the service provider.  Other services may be desired or required at time of closing.  Buyers should always do their own due diligence. 

Provided by Gisele Cline, Broker

RE/Max Ultimate Realty Inc. , Brokerage

Updated May 2019

Want more information on this topic - contact Gisele Cline, Broker - Re/Max Ultimate Rlty inc. or call 416-487-5131 click here

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