Many have asked this question. Some are first time home buyers and others have not bought or sold a home for some time.  Others bought privately and sold privately and have no idea what the costs are.  So, here are some of the things to consider:

  • Home inspections are highly recommended when you buy a home to be sure there are no major problems with the home. And if there are, are they enough that you don’t want to proceed. The cost is around $350.
  • Land transfer tax ranges from .05% to 2%, depending on the price of the home. In Toronto there is an additional 2% for the city.  First time buyers may be exempt from this tax.

  • Mortgage insurance is required if your down payment is less than 20% of the price of the home. You cannot get a mortgage without it.
  • Legal fees vary with each lawyer. It is not wise to try to do it yourself as there are too many issues that could stand in the way of a good purchase.
  • Title insurance now takes the place of a survey if none is available.This is cheaper than a survey and protects you against future infringement or title challenges.
  • Adjustments normally are for taxes. In this case if the taxes are prepaid, you will have to pay your portion and if they are in arrears, they will be paid out of your purchase price.
  • Home insurance is also necessary for you to get a mortgage.

How much does this all add up to? One mortgage broker suggests 1.5% and another 1.6% of the purchase price. So, be sure you have the reserve before you sign on the dotted line.


Submitted by:

Jim McLachlin, Broker

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