How Much Will It Cost
- Mortgage Loan Insurance Premium. If yours is a high ratio mortgage (less than 20% down payment), you may need mortgage loan insurance. To get this insurance, you will be asked to pay the required insurance premium. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing.
- Appraisal Fee. Although not common, your mortgage lender may require that the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.
- Deposit. This is part of your down payment and must be paid when you make an Offer to Purchase. The cost varies depending on the area, but it may be up to 5% of the purchase price. If you wish to make a down payment of 5% and you give a deposit of 5%, then your down payment is considered to be made. Most Buyers try to have a deposit of 20% of the purchase price to avoid the mortgage loan insurance mentioned above.
- Down Payment. At least 5% of the purchase price is usually required for a high-ratio mortgage and at least 20% of the purchase price is usually required for a conventional mortgage.
- Estoppel Certificate Fee . This applies if you are buying a condominium or strata unit and could cost up to $100, but it is usually paid for by the Seller of the condo, not the Buyer.
- Home Inspection Fee. Remember that this may be a condition of your Offer to Purchase. A home inspection is a report on the condition of the home and may cost around $400 depending on the complexities of the inspection. For example, it may be more costly to inspect a home that has large square footage, one that is expensive or one where contaminants, termites or urea-formaldehyde are suspected.
- Land Registration Fees (sometimes called a Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax). You may have to pay this provincial or municipal charge upon closing in some provinces. The cost is a percentage of the property's purchase price and may vary. Check with your lawyer to see what the current rates are (see the Finance section of my website).
- Prepaid Property Taxes and/or Utility Bills. To reimburse the seller for pre-paid costs such as property taxes, filling the oil tank, etc. These are adjustments made on closing by the Buyer, but you need to be aware of these costs ahead of time.
- Property Insurance. The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing the structure of your home and its contents. Property insurance must be in place on closing day.
- Survey or Certificate of Location Cost. The mortgage lender may ask for an up-to-date survey or certificate of location prior to finalizing the mortgage loan. If the seller does not have one or does not agree to get one, you will have to pay for it yourself. It can cost in the $1,000 to $1200 range.
- Legal Fees and Disbursements. Must be paid upon closing. Generally, legal costs range from approximately $800 to $1200 plus HST, depending on which lawyer you choose. Your lawyer/notary will also bill you for disbursements, courier and fax expenses, etc.
- Title Insurance. Your lender or lawyer/notary may suggest title insurance to cover loss caused by defects of title to the property. This generally costs somewhere in the range of $300.