The true cost of buying a home in Canada (beyond the down payment)

Last updated Oct 2026.

When people talk about saving to buy a home, they usually mean the down payment. But the down payment is only the biggest line on a longer list. Closing costs, mortgage insurance, taxes on the purchase and the ongoing costs of owning can easily add tens of thousands of dollars, and the first year of ownership often brings surprises.

This post walks through the full list so you can budget for it. Start with the home affordability calculator to see what price range fits your income.

1. The down payment

In Canada, the minimum down payment depends on the purchase price:

So a $700,000 home needs at least $25,000 + $20,000 = $45,000 down. The CMHC insurance and down payment calculator does this math for you.

If you're a first-time buyer, the First Home Savings Account and the Home Buyers' Plan can help you build the down payment with tax advantages.

2. Mortgage default insurance

With less than 20% down, your mortgage must be insured, usually through CMHC, Sagen or Canada Guaranty. The premium is a percentage of the mortgage amount, and it's usually added to the mortgage rather than paid up front:

• 5% to 9.99% down: 4.00% of the loan,
• 10% to 14.99% down: 3.10%,
• 15% to 19.99% down: 2.80%.

On a $655,000 mortgage with 6.4% down, that's about $26,200 added to what you owe. First-time buyers and buyers of newly built homes can now choose a 30-year amortization on an insured mortgage, which usually adds a small extra premium. In Ontario, Quebec and Saskatchewan, provincial sales tax applies to the premium and must be paid in cash at closing, which many buyers don't expect.

3. Land transfer tax

Most provinces charge a land transfer tax (or a similar registration fee) when a property changes hands. It's often the largest closing cost. In Ontario, the tax is calculated in brackets and climbs quickly; on a $700,000 home it's around $10,475, and buyers in Toronto pay a second municipal tax on top. First-time buyers in Ontario can get a rebate of up to $4,000 on the provincial tax. Alberta and Saskatchewan charge only modest title fees instead.

Ontario buyers can estimate this with the Ontario land transfer tax calculator. In other provinces, check the provincial government's website for current rates and first-time buyer exemptions.

4. Legal fees and title insurance

You'll need a real estate lawyer (or a notary in Quebec) to handle the transfer, register the mortgage and do title searches. Expect roughly $1,500 to $2,500 including disbursements, plus title insurance, which is usually a few hundred dollars.

5. Home inspection and appraisal

A home inspection typically costs $400 to $700 and can save you from expensive surprises. Some lenders also charge for an appraisal, often around $300 to $500, though many waive it.

6. Adjustments at closing

If the seller has prepaid property tax or utilities beyond your closing date, you'll reimburse them. For a condo, you may also pay part of the month's condo fees. These "adjustments" can add a few hundred to a few thousand dollars.

7. Moving and setting up

Movers, a truck rental, utility hook-ups, changing locks, window coverings, and basic tools or a lawnmower all add up. Budget at least $1,500 to $3,000, more for a long-distance move.

8. GST/HST on new homes

Resale homes generally don't have GST/HST on the price, but newly built homes do. Rebates may reduce it, and first-time buyers of new homes may qualify for a larger federal GST rebate under rules introduced in 2025. Ask your builder and lawyer what's included in the price.

A sample closing budget

For a $700,000 resale home in Ontario (outside Toronto), bought by a first-time buyer with the minimum down payment:

A common rule of thumb is to set aside 1.5% to 4% of the purchase price for closing costs on top of the down payment. Lenders usually want to see that you have about 1.5% available.

The ongoing costs of owning

Once you've moved in, a mortgage payment is only part of the monthly picture:

• Property tax: often 0.5% to 1.5% of the home's assessed value per year, depending on the municipality.
• Home insurance: commonly $100 to $250 a month, more in areas with flood or wildfire risk.
• Utilities: heat, hydro, water and sewer, which renters sometimes don't pay directly.
• Condo fees, if applicable, which can rise over time and may include special assessments.
• Maintenance and repairs: a common guideline is 1% to 3% of the home's value each year. A roof, furnace or water heater replacement can easily run $5,000 to $15,000.

Lenders include property tax, heat and half of condo fees when they check whether you qualify, but they don't count maintenance. Your own budget should.

Is buying still worth it?

That depends on how long you'll stay, local rents and prices, and what else you'd do with the money. Ownership builds equity and gives stability, while renting can be cheaper in some markets and lets you invest the difference. The rent vs buy calculator compares both paths over time, and the mortgage payment calculator shows what different rates and amortizations cost.

Our buy a house plan lays out the steps from saving to closing.

FAQ

Can closing costs be added to the mortgage?
Generally no. The mortgage insurance premium can be, but land transfer tax, legal fees and the PST on the premium are usually paid in cash.

Can I use RRSP money for closing costs?
Money withdrawn under the Home Buyers' Plan can be used toward the purchase, and FHSA withdrawals for a qualifying home are tax-free. Check the rules for timing and repayment.

How much should I keep after closing?
Ideally, an emergency fund that covers a few months of expenses, separate from your down payment. See our emergency fund plan.

This post is for educational purposes only and isn't financial, tax or investment advice. Rules, rates and limits can change. Confirm current details with Canada.ca, the CRA or your financial institution, and consider speaking with a qualified professional about your situation.