The 'Hidden' Costs of Buying a Home
Tags: costs of buying a home in Ontario, Costs associated with buying a house, what costs are part of buying a home in Ontario
The purchase price of your home is only one of the costs you’ll encounter. Here are other possible costs you need to consider:
Appraisal – $250 – $350
This is the fee for determining the property’s lending value for mortgage purposes. This value may or may not be the same as the purchase price of the home.
Home Inspection Fees – $250 – $500
The home inspector evaluates the structures & systems that make-up the home and provides you with a written report. While not a requirement, many home buyers make a professional home inspection a condition of their “Offer to Purchase”.
Insurance Costs for High-Ratio Mortgages – .50 – 2.75%
If your down payment is less than 20% of the purchase of the price of your home, you must pay a one-time insurance amount of your loan premium.
The insurance is calculated on a sliding scale based on the amount of mortgage as outlined below:
| Mortgage Amount | Insurance Premium* |
|---|---|
| Up to & including 65% of purchase price | 0.60% |
| Up to & including 75% of purchase price | 1.70% |
| Up to & including 80% of purchase price | 2.40% |
| Up to & including 85% of purchase price | 2.80% |
| Up to & including 90% of purchase price | 3.10% |
| Up to & including 95% of purchase price | 4.00% |
*Note: The insurance premium gets added to the mortgage. Premiums in Ontario are subject to provincial sales tax – the sales tax cannot be added to the loan amount
Land Transfer Tax – See calculations below
These fees are paid to the government whenever a property changes ownership.
| Ontario Land Transfer Tax (for properties not in Toronto) | |
| Total Purchase Price | Calculation of LTT |
|---|---|
| $0 – $55,000 | .005 x Price |
| $55,000 – $250,000 | (.01 x Price) minus $275 |
| $250,000 – $400,000 | (.015 x Price) minus $1525 |
| $400,000 – $2,000,000 | (.02 x Price) minus $3525 |
| Over $2,000,000 | (.02 x Price minus $3525) + (purchase price minus $2,000,000 x .005) |
| Combined Ontario & Toronto Municipal Land Transfer Tax | |
| Total Purchase Price | Combined Calculation of LTT |
|---|---|
| $0 – $55,000 | .01 x Price |
| $55,000 – $250,000 | (.02 x Price) minus $550 |
| $250,000 – $400,000 | (.03 x Price) minus $3050 |
| $400,000 – $2,000,000 | (.04 x Price) minus $7050 |
| Over $2,000,000 | (.04 x Price minus $7050) + (purchase price minus $2,000,000 x .01) |
Legal Fees/Disbursements – $800 (fee) plus $400 – $500 (disbursements)
Make sure that the quote you get from your lawyer includes all of the related expenses.
Title Insurance – See calculations below
Is optional and covers problems that may arise due to survey irregularities, power of sale issues or other issues relating to the property’s previous owners.
Use these Calculators to calculate various components: Calculator
| Freehold Resale Title Insurance** | |
| Total Purchase Price | Calculation of Title Insurance |
|---|---|
| $0 – $500,000 | $325.00 |
| > $500,000 | $325.00 plus ($0.90 per every additional $1,000.00 in purchase price above $500,000) OR (Price less $500,000 / 1,000 x .90) plus $325.00 |
Examples:
$1,000,000 purchase price – Title Insurance calculation is (1,000,000 – 500,000 / 1,000 x .90) + $325.00 = $775.00
$2,000,000 purchase price – Title Insurance calculation is (2,000,000 – 500,000 / 1,000 x .90) + $325.00 = $1,675.00
| Condominium Resale Title Insurance** | |
| Total Purchase Price | Calculation of Title Insurance |
|---|---|
| $0 – $500,000 | $150.00 |
| > $500,000 | $150.00 plus ($0.90 per every additional $1,000.00 in purchase price above $500,000) OR (Price less $500,000 / 1,000 x .90) plus $150.00 |
Examples:
$1,000,000 purchase price – Title Insurance calculation is (1,000,000 – 500,000 / 1,000 x .90) + $150.00 = $600.00
$2,000,000 purchase price – Title Insurance calculation is (2,000,000 – 500,000 / 1,000 x .90) + $150.00 = $1,500.00
**Estimated premiums based on Stewart Title Guaranty Company. There may be some variation in premiums with different insurers. May be subject to solicitor’s administration fees.
Property Survey – $1,000 – $2,000
This is a document that shows all of the property boundaries and measurements, it specifies the location of buildings on the property and indicates any easements or encroachments (pieces that legally become part of your property that you don't own. A right of way or sewer lines for example). This may not be required if Title Insurance is obtained.
Adjustments – $400 – $700
You will be required to reimburse the seller for any prepaid property taxes or utility bills.
Moving Costs – $1500 – $5,000
The cost of the services of a professional mover or a rental truck if you move yourself.
Home Insurance – $1,000 – $2,000/yr
Protection of your home and contents. In the event of loss you'll have your belongings replaced to the best of ability.
Miscellaneous Costs – $500 – $2,000
Incidental costs.
All of the costs involved are estimations based on averages with the current market and should be used only as an educational tool and not as professional advice.
