By: Thom Gallagher

What Does It Really Cost to Buy A House?

Tags: what does it cost to buy a house, hidden costs in buying a home, house Buying expenses, closing costs

It is important to know exactly what costs on top of the purchase price you’ll be responsible for when purchasing a new home. Closing costs often come as a surprise to new home owners and can be quite considerable (between 1.5% and 2.5% of the purchase price), so it is important to budget for them in addition to your down payment, moving, and decorating costs. What are closing costs? Here is a brief list.

Home Inspection: An inspection by a certified professional is for the benefit of the buyer and helps to alleviate concerns with respect to the condition of a property. A home inspection costs between $300 and $450.
Mortgage Appraisal: Lenders require an appraisal of a property to determine market value prior to processing your mortgage. While often waived by the lender, appraisals can range from $150 to $450. Some lenders also charge a mortgage application fee.
Property Survey or Title Insurance: When a new survey is not available, Title Insurance protects Buyers from losses due to title defects. While a survey can cost over $1,000 depending on the size of the property, title insurance typically starts around $275.
Land Transfer Tax: Payable to the province, this tax is calculated in tiers as a percentage of the selling price of a home (visit First time home buyers can qualify for a provincial refund of up to $4000 and a municipal refund, if purchasing in the City of Toronto.
Home Insurance: Mortgage lenders require a certificate of insurance when you take possession of your home. Like all insurance, the price varies depending on a number of variables but ranges from $750 to $2,000 for most properties.
Adjustments (between Seller and Purchaser): Buyers are required to repay the Seller for prepayments they have made in relation to the property such as property taxes, utilities, condo fees, or topping off the oil tank.
Legal Fees and Disbursements: Your lawyer will charge fees for professional services including title search, drafting the title deed and preparing the mortgage. These fees vary, but expect to pay between $800 and $1,200, plus out of pocket and miscellaneous expenses up to $350.
Harmonized Sales Tax (HST): Resale homes are not subject to HST, however, HST is payable on the sale price of a newly constructed house, a significantly renovated home, agricultural properties and more. HST is also collected on professional fees, and on CMHC Insurance fees. Speak to an accountant or contact the CRA for more information on when HST applies to a property purchase.
Not all of these costs may pertain, and depending on your circumstance, others may apply. It is best to speak to your lawyer and other experts from your Home Buying Team for more information.
Thom Gallagher is a Sales representative with extensive home buying ans selling experience. For More information on this article or to discuss listing or buying a home, call Thom at (416)524-6530 or visit