Buying a home: what expenses to expect

Budgeting for a new home is tricky. There is the down payment and the mortgage, and then there is a list of other costs, some of them unexpected, that land on or before closing day. Being caught unprepared is the last thing you want. This is the full list for a purchase in British Columbia.

Before the offer

• Mortgage pre-approval: usually free.
• Deposit: typically 5% of the purchase price, paid within a day or two of subject removal and held in trust. It becomes part of your down payment.

During the subject period

• Home inspection: a few hundred dollars for a condo, more for a detached home with a crawlspace, roof and drainage to assess.
• Appraisal: sometimes required by the lender; a few hundred dollars.
• Strata document order fees for condos and townhomes.
• Oil tank scan for older detached lots, if applicable.

On completion

• Property transfer tax: 1% of the first $200,000, 2% on the portion up to $2,000,000, 3% up to $3,000,000, and 5% above that for residential. First-time buyer and newly built home exemptions may apply.
• GST on new construction (5%), with partial rebates on lower-priced homes.
• Legal or notary fees and disbursements, including title registration.
• Title insurance, often required by lenders.
• CMHC or other default insurance premium if your down payment is under 20% (added to the mortgage, with PST on the premium due at closing in BC).
• Adjustments: reimbursing the seller for prepaid property taxes, strata fees or utilities.
• Home insurance: your lender will need proof before funding.

After you move in

• Moving costs and any immediate repairs.
• Strata move-in fees where applicable.
• Utility hook-ups and deposits.
• A reserve fund. Every home has a first-year surprise; plan for it.

Put numbers on it

Nadia prepares a closing-cost estimate for every buyer before they write an offer, so the number that matters, cash needed on closing day, is known in advance. The mortgage calculator on this site gives a quick first pass, including the property transfer tax.