When people start house hunting, the purchase price gets all the attention. But the real cost of buying a home in Cambridge also includes one-time and ongoing costs that can surprise even well-prepared buyers. In this first post of our Tuesday buyer and seller series, I’m walking through what many buyers budget for beyond the price, with links to the official sources. Think of it as a checklist to start the conversation, not a quote.
What Goes Into the Cost of Buying a Home in Cambridge?
CMHC’s home purchase cost worksheet is a handy starting point. It splits costs into up-front costs and other costs like moving and repairs.
CMHC notes closing costs are equivalent to 1.5% to 4% of the purchase price, and many first-time buyers are surprised by them.
The Deposit: Money You Need Early
CMHC’s worksheet lists the deposit as being paid when you sign the offer to purchase, and its Homebuying Step by Step guide explains that on closing day you bring your down payment minus the deposit to your lawyer.
When a brokerage holds your deposit, RECO’s consumer deposit insurance covers events like brokerage theft, fraud or insolvency, up to $200,000 per claim, at no cost to you (subject to the policy’s terms). It doesn’t cover disputes over who gets the deposit; that’s a question for your lawyer.
How Does Land Transfer Tax Work in Ontario?
According to the Government of Ontario, when you buy land or an interest in land in Ontario, you pay land transfer tax to the province when the transaction closes. Ontario publishes the rates on its Calculating Land Transfer Tax page. Your lawyer can confirm the amount for your purchase.
The same Ontario page also notes:
- Buyers in the City of Toronto may also pay Toronto’s own municipal land transfer tax.
- A 25 per cent Non-Resident Speculation Tax may apply to certain buyers who aren’t Canadian citizens or permanent residents.
- HST applies to newly constructed or substantially renovated homes, but not to resale homes.
Is there a land transfer tax refund for first-time buyers?
Yes. Ontario offers a land transfer tax refund for first-time homebuyers, with a maximum refund of $4,000. Eligibility rules apply, so speak with your lawyer or accountant about whether it applies to you.
Mortgage Default Insurance and Related Costs
The Government of Canada explains that if your down payment is less than 20% of the price of your home, you’ll typically need to buy mortgage loan insurance, also called mortgage default insurance. CMHC notes that in Ontario, premiums are subject to provincial sales tax, which can’t be added to the loan amount. The Government of Canada adds that this tax is paid when you get your mortgage.
For mortgage specifics, talk with a licensed mortgage professional. You can check a mortgage broker or agent’s licence through FSRA, which regulates Ontario’s mortgage brokering sector.
Legal Fees, Title Insurance and Other Closing Costs
CMHC’s worksheet lists closing items many buyers budget for:
- Legal fees and disbursements
- Title insurance
- Land registration fee
- Property insurance
- Survey costs
- Appraisal fee, if applicable
- Estoppel certificate fee, for condos
Buying a resale condo? Ontario notes that you may request and pay for a status certificate. Your lawyer can explain what’s included in your closing costs.
How Much Does a Home Inspection Cost in Ontario?
The Government of Ontario’s What to know before buying a home page says home inspection fees range from $350 to $600 and may be higher, depending on the size and condition of the home. For questions about a specific property, speak with a qualified home inspector.
Property Tax Adjustments in Cambridge
CMHC’s guide notes that you may have to reimburse the seller for property taxes and utility bills they’ve paid in advance. Your lawyer can walk you through these adjustments.
In Cambridge, the City’s taxes page explains that interim tax bills go out in late January, with instalments due the first working days of March and May. Final bills go out in late May, with instalments due the first working days of July and September.
Moving Day and Ongoing Costs to Plan For
CMHC’s worksheet also lists moving expenses and service hook-up fees, appliances, window coverings, snow clearing equipment and repairs. Its guide adds ongoing costs like property taxes, insurance, utilities, condo fees (if applicable) and routine maintenance.
Our Moving Checklist helps you track who to contact when you move. For the whole buying process, see our Complete Guide to Buying a Home.
FAQ
How much are closing costs when buying a home?
CMHC says closing costs are equivalent to 1.5% to 4% of the purchase price. Your lawyer can give you a closer estimate.
Do first-time buyers pay land transfer tax in Ontario?
Land transfer tax applies, but according to the Government of Ontario, eligible first-time buyers may get a refund of all or part of it, up to $4,000. Ask your lawyer or accountant about eligibility.
How much does a home inspection cost in Ontario?
The Government of Ontario says fees range from $350 to $600 and may be higher, depending on the home’s size and condition.
When are property taxes due in Cambridge?
According to the City of Cambridge, interim instalments are due the first working days of March and May, and final instalments are due the first working days of July and September.
This article is for general information only and isn’t legal, tax or financial advice.
Thinking About Buying in Cambridge?
At Shaw Realty Group, we help 200+ homes a year change hands, and we’re happy to walk you through what to expect before you start your search. Contact us to chat with me or one of our agents, or drop by our office at Unit B-201, 215 Queen St W, Cambridge.