How much does it cost to buy a home?
The cost of buying a home varies, but it is important to know all the additional costs and fees involved.
Buying a home is expensive but there can be good financial reasons to do it. For example, a home is an asset that can grow in value over time, and the rent won't keep going up.
Some of the costs of buying a home are:
- Down payment - A portion of the price of the home (usually between 5% and 20%) that you must pay before you can apply to a bank, trust or credit union for a loan (mortgage).
- Mortgage - A loan that is usually repaid in monthly installments (usually over 5-35 years). You must repay both the amount you borrow (principal) plus the charge for borrowing the money (interest).
- Property taxes - Taxes you must pay to your municipal government that help finance local services such as police and fire protection, garbage and snow removal, road maintenance and public health.
- Condominium fees- Condominium owners usually pay a monthly fee for general building maintenance.
- Renovation - Structural repairs required, especially with older homes.
- Maintenance - A cost that varies depending on the style, size and age of your home. You may also have to pay for unexpected repairs and replacements.
First-time buyers are often surprised by the hidden costs of home ownership. These costs include:
- Property appraisal fees
- Home inspection fees
- Service charges for connecting utilities
- Moving expenses
- Property insurance
The Canada Mortgage and Housing Corporation (CMHC) has a helpful guide called, How much will it really cost?
You can contact Greg Hollander for more information about buying a home. To contact him, go to Greg Hollander.