Buying your first home is a huge milestone, especially in Canada’s wild real estate market. But if you’re only budgeting for your down payment and monthly mortgage, you’re in for a shock. From land transfer tax to surprise utility fees, unexpected expenses can pile up fast.
Here are 10 hidden costs for first-time home buyers in Canada, plus tips to avoid getting caught off guard.
1. Land Transfer Tax (LTT)
What it is: A provincial and sometimes municipal tax based on the home’s purchase price.
Hot spots: Ontario, B.C., and especially Toronto.
How to avoid it:
Apply for first-time buyer rebates:
- Ontario: Up to $4,000
- Toronto: Up to $4,475
You must apply through your lawyer during closing!
2. Home Inspection Fee
What it is: A certified inspector checks for structural, electrical, and plumbing issues.
Cost: $400–$700
Tip: Never skip this, even in bidding wars. It’s a cheap safeguard against massive future repairs.
3. Appraisal Fee
What it is: Your lender may require a home appraisal to verify value.
Cost: $300–$500
How to avoid it: Ask lenders if they include this in their service. Some waive the cost as part of your mortgage package.
4. Legal Fees and Disbursements
What it is: Covers title transfer, mortgage paperwork, and government filings.
Cost: $800–$2,500 depending on province and complexity.
Tip: Get all-inclusive quotes that include disbursements, not just legal fees.
5. Title Insurance
What it is: Protects you from fraud, ownership disputes, or title defects.
Cost: $200–$400
Tip: Ask your lawyer to include this in your closing bundle. Don’t skip it! Title issues can be a nightmare.
6. Mortgage Default Insurance (CMHC)
What it is: Mandatory if your down payment is under 20%.
Cost: 2.8%–4% of your mortgage (added to your loan)
How to avoid it:
Put down 20% if you can, or get gifted down payment support from family if available.
7. Property Tax & Utility Adjustments
What it is: You may need to reimburse the seller for prepaid property taxes, hydro, or gas.
Cost: Varies by region and timing
Tip: Ask your lawyer or real estate agent for a closing estimate that includes adjustments.
8. Moving Costs
What it is: Hiring movers or renting a truck for your big day.
Cost: $500–$2,000+
Tip: Book mid-week and mid-month. Compare quotes and get fixed rates if possible.
9. Utility Hook-Up Fees
What it is: Charges for activating electricity, internet, water, and gas.
Cost: $100–$300+ per provider
Tip: Call ahead and ask about bundles or fee waivers for new customers.
10. Immediate Repairs & Essentials
What it is: New locks, curtains, minor repairs, garbage bins, etc.
Cost: $1,500–$3,000 on average
Tip: Budget for a “move-in fund” to cover early expenses without dipping into credit.
Bonus: Budget Beyond the Mortgage
Just because the bank approves you for $600,000 doesn’t mean you should spend it all. Leave a cushion for interest rate changes, surprise repairs, or lifestyle adjustments.
Final Thoughts
Buying your first home is a major win, but staying financially prepared is just as important. By understanding and planning for these hidden costs, you’ll protect yourself from stress…..and debt.
Are you a first-time buyer in Canada and feeling overwhelmed? Let’s simplify the process together. Contact us and we will guide you every step of the way.
At Indi Mortgage, we offer a fresh, modern approach! One that’s simple, transparent, and built entirely around your needs and long term goals. We believe getting a mortgage shouldn’t feel overwhelming. It should feel empowering and exciting!
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