First Time Buyers

This article is for people who are buying property for the first-time to aware them of extra costs involved.
The following relates to Ontario in Canada but provinces and states will have similar fees to pay, check them out.

Bank Inspection Fees
When applying for a mortgage at a bank they may require an inspection of the property before allotting the mortgage, expect to pay $125 to $200, some banks waive this cost.

Building Inspector Fees
Before buying it is recommended to hire a professional building inspector to assess any structural problems or required repairs, if the home is new then the builder is legislated to provide an inspection before taking possession also usually the builder gives a 1 year guarantee where any problems within that year they will fix. Expect to pay $300-$500 for a building inspector, make sure that the inspector you hire is qualified.

Survey of Property
To close a home purchase a survey of the property may be required if the vendor does not have one, this is a drawing of the property which shows the perimeters and location of any building on the property. It will show if any of the surrounding properties have engrossed onto your property etc. Expect to pay $750-$1000

Legal Fees
A lawyer is to act on your behalf in purchasing and mortgaging a property, the lawyer will check that there are no liens against the property, transfer of deed and adjustments of costs, these may include property taxes, utilities etc. prepaid by the current owner beyond the closing date and must be paid at the time of closing. As lawyer’s fees vary check a few out to find the best price and what is included in that price. Expect to pay $500-$800.

Land Transfer Tax and GST
A one-time provincial tax is to be paid on the percentage of the purchase price of the property this is calculated on a sliding scale. For example in Ontario:
Cost of property; $275,000
0.5% is charged on the first $55,000  : Tax payable- $275.00
1% tax  range $55,001-$250,000       : Tax payable- $1,950.00
1.5% tax range $250,001-$400,000   : Tax payable-  $375.00
                                        Total Land Transfer Tax  $2,600
Greater than $400,000:  2% Tax
First time buyers of a new home may be eligible for a land tax rebate to a limit of $2,000
On new homes GST may be included in price of property.

Mortgage Insurance
If your mortgage is 75% of the properties selling price it is considered high-ratio, and as the home buyer you must buy insurance to protect the lender in case you default. The insurance is provided by CMHC (Canadian Mortgage and Housing Corporation). The cost is calculated on a sliding scale based on the ratio of mortgage to home value.

Financing Required

Premium % of Loan Amount

Up to and Including 65%


Up to and including 75%


Up to and Including 80%


Up to and including 85%


Up to and including 90%


Up to and including 95%Traditional Down Payment
Flex Down


Secure line of Credit Surcharge (Less than or Equal to 80%) Non-amortized repayment option
5 Years
10 years
Extended Amortization Surcharges
For every 5 years of amortization beyond 25 years mortgage period



CMHC website which covers great information on buying or selling a home. 

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