5.4.1 Case study: Costs of buying a home

From: Financial Consumer Agency of Canada

Francis and Angela knew that buying a new home was a big financial commitment, but they'd been saving for a year, and with their parents' help they had $30,000 they could spend. The house they wanted would cost $225,000, and they wanted to renovate the kitchen and bathrooms to make them more modern.

Francis and Angela add up the extra costs of buying a new home.


"The down payment on the mortgage, including mortgage insurance, is over $17,000," Angela said, "and all the fees will be another $4,500 at least."

"$4,500! Where did that come from?" Francis asked.

Angela showed Francis a list of expenses:

  • Property inspection, $350
  • Appraisal fee, $150
  • Legal fees, $750
  • Closing costs, $300
  • Taxes*, $2,000
  • Moving costs,$1,000
  • Hook-up costs (cable, phone, internet), $300

"And there's sales tax on all the fees, too," she pointed out. "All together, it'll be over $5,000." Francis added a few items of his own.

  • Replace fridge, $1,000
  • New gardening and maintenance tools, $250
  • Drapes for windows, $750

Angela added it up. "Including the down payment, we're spending over $22,000 before we even start. We have about $8,000 left, and there are probably more expenses we haven't thought of yet."

"I don't think we can do the renovations we want for $8,000," Francis said.

"You're right," Angela agreed. "Maybe we can paint the rooms ourselves, and put off the renovations until later."

* Note: Fees and taxes differ among provinces and territories. For example, while most provinces charge a land transfer tax such as Quebec's taxe de mutation, Alberta, Saskatchewan and rural Nova Scotia do not.

Lessons Francis and Angela learned:

  • Buying a home involves many large and small costs.
  • Planning your buying and moving costs in advance helps you get a realistic estimate of the total costs.
  • Be prepared to adjust or delay your plans to fit your budget.
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