Costs Associated with Buying a Property

Team Gill • November 21, 2019

So you want to buy a property, that’s great! Make sure you have your wallet ready to bring to the table. In addition to the downpayment, there are many other costs associated with purchasing a home; typically, these are called closing costs.

Your closing costs represent the things you will have to pay for out of your pocket, and the amount of money necessary to finalize the purchase of a property. And like most things in life, when it comes to closing costs, it pays to plan ahead.

The best time to work through the costs associated with closing your mortgage is before you even start looking for a place to buy. Closing costs should be part of the pre-approval conversation; they are just as important as saving for your downpayment.

If your mortgage is high ratio and insured through CMHC, they will want to see that you have at least 1.5% of the purchase price available in addition to your downpayment. Ensuring this money is available will make sure you have enough to pay for everything associated with buying a property.

So with that said, here is a list of the things that will cost you money when you’re buying a home. If you have any questions or would like a referral to an industry professional, please ask!

Inspection or Appraisal

A home inspection is when you hire a professional to assess the condition of the property to make sure that you won’t be surprised by unexpected issues.

An appraisal is when you hire a professional to compare the value of the property against other properties that have recently sold in the area.

The cost of a home inspection is yours, while the cost of the appraisal is sometimes covered by your high-ratio insurance, and sometimes covered by you!

Lawyer or Notary Fees

To handle all the legal paperwork, you will be required to hire a real estate lawyer. They will be responsible for the transfer of the title from the seller’s name into your name and will make sure the lender is registered correctly on the title. Chances are, this will be one of your most significant expenses, except if you live in a province with a property transfer tax.

Taxes

Depending on which province you live in, and the purchase price of the property you are buying, you might have to pay a property transfer tax or land transfer tax. This cost can be high; you’ll want to know ahead of time an estimated cost here, before ever writing an offer.

Insurance

Before any financial institution lends you money, they will want to see that you already have property/home insurance in place for the purchase. If disaster strikes and something happens to the property, they want to be listed on an insurance policy to cover the costs.

Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation.

Moving Expenses

Congratulations, you have a home, now you have to get all your stuff there! Don’t underestimate the cost of moving your stuff. If you’re moving across the country, the cost of hiring a moving company is steep, while renting a moving truck is a little more reasonable. If you’re moving locally, hopefully, the cost of moving amounts to some gas money and pizza for friends.

Utilities

Hooking up new services to a property is more time consuming than costly. However, if you are moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services. It’s not really worth moving into your new place if you can’t afford to turn on the power or connect the water.

So there you have it, this covers the majority of the costs associated with buying a new property. However, this list is by no means exhaustive, but it should serve as a guide as you work with trusted professionals.

If you have any questions about your closing costs, or anything else mortgage-related, contact us anytime, we’d love to hear from you!

Share

Sign up to to our newsletter to hear weekly updates on market news, timely buyer/seller tips, and up to date rates

SIGN UP
Mick & Sheila Gill
CANADIAN MORTGAGE EXPERTS
RECENT POSTS 

Your Guide To The A First Home Savings Account (FHSA)

By Team Gill • April 22, 2025
Dreaming of owning your first home? A First Home Savings Account (FHSA) could be your key to turning that dream into a reality. Let's dive into what an FHSA is, how it works, and why it's a smart investment for first-time homebuyers. What is an FHSA? An FHSA is a registered plan designed to help you save for your first home taxfree. If you're at least 18 years old, have a Social Insurance Number (SIN), and have not owned a home where you lived for the past four calendar years, you may be eligible to open an FHSA. Reasons to Invest in an FHSA: Save up to $40,000 for your first home. Contribute tax-free for up to 15 years. Carry over unused contribution room to the next year, up to a maximum of $8,000. Potentially reduce your tax bill and carry forward undeducted contributions indefinitely. Pay no taxes on investment earnings. Complements the Home Buyers’ Plan (HBP). How Does an FHSA Work? Open Your FHSA: Start investing tax-free by opening your FHSA. Contribute Often: Make tax-deductible contributions of up to $8,000 annually to help your money grow faster. Withdraw for Your Home: Make a tax-free withdrawal at any time to purchase your first home. Benefits of an FHSA: Tax-Deductible Contributions: Contribute up to $8,000 annually, reducing your taxable income. Tax-Free Earnings: Enjoy tax-free growth on your investments within the FHSA. No Taxes on Withdrawals: Pay $0 in taxes on withdrawals used to buy a qualifying home. Numbers to Know: $8,000: Annual tax-deductible FHSA contribution limit. $40,000: Lifetime FHSA contribution limit. $0: Taxes on FHSA earnings when used for a qualifying home purchase. In Conclusion A First Home Savings Account (FHSA) is a powerful tool for first-time homebuyers, offering tax benefits and a structured approach to saving for homeownership. By taking advantage of an FHSA, you can accelerate your journey towards owning your first home and make your dream a reality sooner than you think. 

4 Ways to Access Your Home Equity

By Team Gill • April 8, 2025
If you've been a homeowner for many years, it is likely your property value has increased significantly. One advantage of homeownership is the opportunity to build equity. Home equity growth, partnered with the security of living in your own home, is why most Canadians believe homeownership is the best choice for them! While home equity is one of your greatest assets, accessing home equity is often overlooked when putting together a comprehensive financial plan. So if you’re looking for a way to access some of your home equity, you’ve come to the right place! Simply put, home equity is the actual market value of your property minus what you owe. For instance, if your home has a market value of $650k and you owe $150k, you have $500k in home equity. If you want to stay in your home but also access the equity you have built up over the years, there are four options to consider. Conventional Mortgage Refinance Assuming you qualify for the mortgage, most lenders will allow you to borrow up to 80% of your property’s value through a conventional refinance. Let’s say your property is worth $500k and you owe $300k on your existing mortgage. If you were to refinance up to 80%, you would qualify to borrow $400k. After paying out your first mortgage of $300k, you’d end up with $100k (minus any fees to break your mortgage) to spend however you like. Even if you paid off your mortgage years ago and own your property with a clear title (no mortgage), you can secure a new mortgage on your property. Reverse Mortgage A reverse mortgage allows Canadian homeowners 55 or older to turn the equity in their home into tax-free cash. There is no income or credit verification; you maintain ownership of your home, and you aren't required to make any mortgage payments. The full amount of the mortgage will become due when you decide to move or sell. Unlike a conventional mortgage refinance, reverse mortgages won’t allow you to borrow up to 80% of your home equity. Rather, you can access a lesser amount of equity depending on your age. The interest rates on a reverse mortgage can be slightly higher than the best rates currently being offered through standard mortgage financing. However, the difference is not outrageous, and this is an option worth considering as the benefits of freeing up cash without mortgage payments provides you with increased flexibility. Home Equity Line of Credit (HELOC) A Home Equity Line of Credit allows you to set up access to the equity you have in your home but only pay interest if you use it. Qualifying for a HELOC may be challenging as lender criteria can be pretty strict. Unlike a conventional mortgage, a HELOC doesn't usually have an amortization, so you're only required to make the interest payments on the amount you've borrowed. Second Position Mortgage If the cost to break your mortgage is really high, but you need access to cash before your existing mortgage renews, consider a second mortgage. A second mortgage typically has a set amount of time in which you have to repay the loan (term) as well as a fixed interest rate. This rate is usually higher than conventional financing. After you have received the loan proceeds, you can spend the money any way you like, but you will need to make regular payments on the second mortgage until it's paid off. If you’re looking for a way to access the equity in your home to free up some cash, please get in touch. You’ve got options, and we can work together to find the best option for you!