Typical Costs Associated With a Home Purchase

After you have been pre-approved for a mortgage, providing a down payment to purchase your new home is not the only expenditure required to finish the sale of a house. Additional costs may affect your ability to buy a home. Many of the closing costs that you are responsible for are mandatory, so it is important to be mindful of the additional fees you may need to be responsible for:

Home Inspection

Before you settle down in your new home and prepare to move in with all your belongings, you may want to enlist a home inspector to inspect the house and check to see if any issues need to be rectified before a commitment to purchase is made. A proper home inspection could potentially save you thousands of dollars on future repairs.

Appraisal of the Home

Depending on the loan-to-value ratio and other factors, the lender or insurer may request that an appraisal is completed in order to establish value and or the current condition of the property.

Survey of Property

The purpose of a residential survey is to identify any possible restrictions or constraints that could be negatively impacting your property’s value. Certain setbacks which can include shared property with neighbour’s (i.e. part of your driveway being on your neighbour’s property) or invasive property (i.e. your neighbour’s extended roof which hangs over your side of the property). In some cases, portions of your property may be the city’s property which will be discovered through a survey.

Title Insurance

Title insurance protects you and the lender against losses related to the property’s title or ownership. It can protect homeowners from municipal work operations, zoning infringements and irregularities on the property. You may encounter a lender that orders you to take their title insurance, which is an expenditure that is out-of-pocket.

Home Insurance

Home insurance works to protect all assets inside of your home and the physical structure of the home. Typically, home insurance protects you from occurrences that could negatively impact the value of your home such as house fires, floods, extensive wind damage (tornadoes), sewage backups, etc. Other necessary benefits include protection in case of robbery or vandalism of the premises.

Legal Fees (Closing Costs)

Closing costs are the fees associated with your home purchase that is paid, usually to the lawyer or notary handling your file, at the closing of the purchase transaction. Most lenders estimate these funds at 1.5% of the purchase price and will require verification that you have the funds in your possession to cover them. Some items that may be included in the Closing costs are land transfer tax, legal fees or title search fees.

Land Transfer Tax

Purchasing property from another owner subjects you to pay a land transfer tax. The land transfer tax fluctuates across different provinces, and it is primarily determined by the selling price of the property.

Fees from The Closing Date Onwards


After you’ve finalized the sale of your new home, it may take you a considerable amount of time to move in, because you’ll have to organize a date where you can move in your belongings and ensure the previous owner’s belongings are removed. In the meantime, the previous owner will still be paying for utility fees, hydro bills, and property taxes. Ensure that you reimburse the former owner for expenses that were no longer their responsibility following the closing day.

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