The True Costs of Homeownership in Canada: What You Need to Know

Buying a home in Canada is an exciting milestone, but it’s important to understand that your down payment and mortgage payments are just the beginning. Homeownership comes with several additional costs—some one-time expenses and others ongoing—that need to be factored into your budget.

If you’re purchasing your first home, knowing what to expect will help you plan ahead and avoid financial surprises. Let’s break down the hidden costs that come with homeownership in Canada.

While your down payment is likely the biggest upfront cost, there are several other expenses to prepare for when closing on a home.

Closing Costs

Closing costs are an essential part of the home-buying process in Canada, and they often amount to more than expected. In general, you should budget 1.5% to 4% of the home’s purchase price for closing costs, which are in addition to your down payment.

Some of the most common closing costs in Canada include:

✅ Land Transfer Tax – This varies by province and municipality. First-time home buyers may qualify for rebates in some provinces.

✅ Legal Fees and Disbursements – A real estate lawyer is required in Canada to finalize your home purchase. Legal fees typically range from $1,000 to $2,500.

✅ Title Insurance – Protects you from property ownership disputes and fraud. This is often recommended and costs approximately $250 to $500.

✅ Property Appraisal Fee – If required by your lender, an appraisal ensures the home is worth what you’re paying. The cost ranges from $300 to $600.

✅ Home Inspection Fee – While not mandatory, a home inspection is highly recommended. Costs vary but typically range from $400 to $800.

✅ GST/HST on New Homes – If you’re purchasing a newly built home, you may need to pay GST or HST, depending on your province. There are rebates available for eligible buyers.

Some closing costs can be negotiated, and in certain cases, lenders may cover part of them. However, in competitive real estate markets, buyers often need to cover the full amount.

Moving Costs

Once you’ve closed on your home, the next expense is moving. The cost of hiring professional movers varies, but for a local move, you can expect to pay between $1,000 and $2,500, while long-distance moves across provinces can exceed $5,000.

Even if you opt for a DIY move, truck rentals, packing materials, and equipment can add up quickly.

Ongoing Costs of Homeownership

Once you’ve settled into your new home, you’ll need to budget for recurring expenses. Here are some of the key costs Canadian homeowners face.

Property Taxes

Property taxes are an ongoing expense and are determined by your municipality. They are based on the assessed value of your home and vary across Canada. For example, in Burlington, Ontario, property tax rates are around 1%, while in other regions, they may be higher or lower.

Many homeowners pay property taxes as part of their mortgage payments, with the lender holding the funds in an escrow account to pay them when due. However, if your property’s assessed value increases, your taxes may rise accordingly, even if you have a fixed-rate mortgage.

Home Insurance

Home insurance is mandatory when securing a mortgage and is essential for protecting your property. The cost of insurance depends on factors such as location, home size, and risk factors like weather exposure or crime rates.

In Canada, the average annual home insurance premium ranges from $1,000 to $2,500.

Mortgage Default Insurance (CMHC Insurance)

Unlike private mortgage insurance (PMI) in the U.S., Canada requires mortgage default insurance (CMHC insurance) for buyers with a down payment of less than 20%. This protects the lender in case of default and is added to your mortgage payments.

CMHC insurance premiums range from 2.8% to 4% of the loan amount. The higher your down payment, the lower your premium.

Utilities and Services

New homeowners are often surprised by their utility costs, especially if moving from a rental. Common monthly expenses include:

💡 Electricity & Natural Gas – Costs vary by province but can range from $150 to $400 per month.
🚰 Water & Sewer – Typically $50 to $150 per month, depending on your location.
📶 Internet & Cable – Plans start at $60 per month and can go beyond $150 per month for high-speed service.
🚛 Garbage & Recycling Collection – Some municipalities charge a separate waste management fee.

Routine Maintenance & Repairs

As a homeowner, you’re responsible for keeping your property in good condition. Regular maintenance prevents larger, more expensive repairs down the road.

Some common maintenance expenses include:

🔧 HVAC Servicing – Annual furnace and air conditioning tune-ups cost $150 to $300.
🌱 Lawn Care & Snow Removal – Lawn maintenance can be $50 to $100 per visit, while snow removal services range from $500 to $1,000 per season in areas with heavy snowfall.
🧹 Gutter Cleaning & Chimney Sweeping – Expect to pay $150 to $400 per service.
🐜 Pest Control – Routine pest management services can cost $200 to $500 annually.

Unexpected repairs can be costly. A leaky roof, a broken furnace, or a plumbing emergency could set you back thousands of dollars. It’s wise to have a contingency fund of at least 1% of your home’s value per year to cover surprise repairs.

Be Financially Prepared for Homeownership

Owning a home in Canada is a significant investment, and budgeting beyond your down payment and mortgage is essential. Before purchasing, ensure you factor in:

✔️ One-time costs – Closing costs, land transfer taxes, legal fees, and moving expenses.
✔️ Recurring expenses – Property taxes, home insurance, utilities, and maintenance.
✔️ Emergency fund – Set aside funds for unexpected repairs and market fluctuations.

By preparing for the full scope of homeownership costs, you’ll set yourself up for financial success and enjoy your home without unnecessary stress.

Thinking about making a move? Let’s chat about your homeownership goals! 🏡💬