Ask a Mortgage Broker

Ask a Mortgage Broker

Beyond a Mortgage, What Costs Should I Budget For When Buying a Home?

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There’s a lot you need to know when navigating the world of mortgages.

And, if you’re not careful, it’s quite easy to get tripped up in the lingo, the procedures, and the payments. (Not to mention the penalties.)

Which is why we’ve recruited Jerome Trail, owner and broker of record at The Mortgage Trail, to answer the most important questions homebuyers and homeowners should understand before moving forward in their mortgage process.

Today, Trail is offering the answer to the inquiry: “Beyond my mortgage, what costs should I budget for when buying a home?”


Have another mortgage question, or looking for mortgage advice? 

Contact Jerome at The Mortgage Trail — mention STOREYS and you’ll receive a free appraisal!


While Trail’s answer doesn’t apply to Toronto-buyers only, there is one aspect that TO-locals will want to pay particular mind towards: the additional costs of a land transfer tax.

“The most significant costs to budget for on closing day would be the land transfer tax (especially in Toronto!), and the lawyer’s fees and disbursements,” Trail explains. “In February 2008, the City of Toronto started charging a municipal land transfer tax, which is in addition to the provincial land transfer tax.”

READ: Fixed vs Variable: What Makes Different Mortgage Types Unique?

Trail describes how on a $1M purchase in Toronto, this municipal land transfer tax would total $32,950, or $16,475 to each of the municipal and provincial government bodies. On the same purchase, the associated legal fees would amount to approximately $3,000.

“As part of our regular due diligence, these items are broken down for our clients so they are not surprised on closing day as they are unavoidable,” Trail says.

1145 Woodbine Avenue (Zolo)

Beyond the land transfer tax remaining top of mind, Trail also encourages buyers to budget for additional expenses which — while not mandatory for everyone — may be preferred or required in some cases.

For example, Trail cites a home inspection as incurring a cost around $500. Moving costs, meanwhile, could range from $100 (for the DIY type) to $10,000 (for a full-service provider).

If the home’s seller has paid their property taxes in advance, a buyer may be required to reimburse them at closing.

And of course, once you’re standing in your new abode, settling in continues: Utility set-up costs should be considered. Those with limited credit may be required to pay a deposit for such services, or — like property taxes — if a seller has prepaid for these in advance, a reimbursement at closing may be necessary.

Indeed, while a mortgage and downpayment may be your top priorities where financing your new property is concerned, there are a variety of other expenses that should be kept top of mind throughout the process.

In fact, here’s one more cost you’ll want to budget for: The price of pizza and beer to share with the friends who help you haul a couch to your new home on moving day.


This article was produced in partnership with STOREYS Custom Studio.

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