Closing costs are just part of the package when you’re buying a home. The exact amount will vary with each purchase but you should look to budget between 2% - 4% of the final sale price. By far the largest cost will be the Property Transfer Tax (PTT) and, if you're buying a newly built home, GST. But don’t forget to look for rebates and if you’re a first time home buyer, there are some great incentives available from both the provincial and federal government.
In most cases your closing costs must be paid up-front and it’s important to budget for accordingly. For instance, GST can be included in your mortgage amount, however, PPT cannot.
Here’s a breakdown of some of the average costs that you can expect when getting a mortgage in Canada.
Your mortgage provider may arrange default insurance for you. You can add this to your mortgage total, or if you have the money, you can pay it in full. This insurance protects lenders in the event a home buyer defaults on a mortgage.
Estimated Cost: Between 0.60% and 4.50% of the mortgage amount
Required? Yes, if you have less than a 20% down payment
GST is applied to newly built homes at 5%. You may be entitled to a GST New Housing Rebate up to a max of $6,300.
Estimated Cost: 5% of the home purchase price
Required? Yes, if the house you're buying is a new build
Talk to one of our advisors if you’re in the market to buy a new home. They help you adjust your budget to accommodate closing costs and other ongoing expenses, such as property taxes, home insurance, ongoing maintenance, strata fees, so you are prepared for every home-ownership scenario.
Now could be the best time for you to break into the real estate market. Take advantage of our 120-day rate guarantee and lock in your rate when you apply for a mortgage online. Being pre-approved will give you piece of mind when you’re hunting for the perfect home.
Talk to an advisor today about buying your new home.