What It Actually Costs to Buy Your First Home in Ontario

The purchase price is the number everyone talks about. It is not the number that catches first-time buyers off guard. These are the costs to plan for when you buy in Kitchener, Waterloo, Cambridge, Guelph or anywhere else in Ontario.

Before you buy

• Deposit. Paid with your accepted offer and credited toward your down payment. It is usually a meaningful sum and needs to be available quickly, often within 24 hours of acceptance.
• Down payment. In Canada the minimum is 5% on the first $500,000 of the purchase price, with a higher percentage required on the portion above that, and 20% is the threshold where mortgage default insurance is no longer required.
• Home inspection. A few hundred dollars, and worth it. Add well and septic inspections for rural properties.

On closing day

• Ontario land transfer tax. Calculated on a sliding scale based on price. First-time buyers may qualify for a provincial refund, so confirm eligibility with your lawyer early. Buying in the City of Toronto means a second municipal land transfer tax on top.
• Legal fees and disbursements. Your lawyer's fee plus title search, registration and related costs.
• Title insurance. Usually arranged by your lawyer.
• Mortgage default insurance. Required when your down payment is under 20%. The premium is normally added to the mortgage, but the provincial sales tax on it is payable on closing.
• Adjustments. You reimburse the seller for property taxes, and sometimes utilities or condo fees, that they prepaid past the closing date.
• Appraisal fee, if your lender requires one.

Right after you move in

• Home insurance, which your lender will require in place before closing.
• Moving costs, utility setup and any hot water tank or HVAC rental transfers.
• Immediate repairs, locks and cleaning.
• Ongoing monthly: mortgage, property taxes, utilities, condo fees if applicable, and a maintenance reserve. Older homes need a bigger reserve.

How to avoid surprises

Get a written pre-approval, ask your lawyer for an estimate of closing costs before you make an offer, and keep a cushion beyond the minimum down payment. A common guideline is to set aside roughly 1.5% to 4% of the purchase price for closing costs, depending on price, location and whether the first-time buyer land transfer tax refund applies to you.

This is general information, not legal or tax advice. Your lawyer and mortgage professional will confirm your numbers.

Ready to run your numbers

Use the mortgage calculator to test payments, read the Waterloo Region buyer guide, or get in touch and we can build a realistic budget for what you want to buy.