Closing Costs Associated With Purchasing Ottawa Area Real Estate

While the purchase price of your home is the largest cost you will encounter, there are other costs to prepare for when buying a home.

Appraisal fee Mortgage lenders will usually loan a percentage of the home’s purchase price or the market appraisal of the property, whichever is lower.
Application fee Find out whether or not your lending institution charges to process your mortgage application. In many cases, if you are dealing with a bank that you have other accounts with, they will waive the application fee.
Land survey fee Lenders require a plot plan or survey of the property you intend to buy. On properties located in subdivisions in urban areas, lenders will often accept an existing survey, depending on when it was done. However, if there is no existing survey, be prepared to pay a substantial fee for a new survey.
Home inspection fee Many homebuyers choose to have a home inspection done prior to finalizing their offer to purchase.
Legal fees You will need to pay your lawyer to arrange your mortgage as well as for “disbursements” such as title search, drawing up the title deed and preparing and registering the mortgage.
Land Transfer Tax This tax is payable by anyone who purchases property in Ontario. A REALTOR or lawyer can help you calculate how much tax you will pay on your purchase.
HST If you are buying a new home, you will be required to pay Harmonized Sales Tax of on the price of your home. HST does not apply to most resale homes.
Insurance There are several types of insurance that may be required when buying your home. If you are arranging a “high-ratio” mortgage (less than 25% down payment) you will need to purchase mortgage insurance. Mortgage lenders require you to carry fire and extended coverage insurance that exceeds the amount of the outstanding balance of the buildings. Other insurance you may want to consider include title insurance and life insurance.
Other costs You will likely have to make property tax adjustments and interest adjustments on utility bills, heating oil etc.
Maintenance and utility costs Finally, be sure to budget for heating, electricity, water and any immediate renovations you may have planned. It’s a good idea to put aside any spare cash and contribute regularly to a maintenance fund so you will be prepared for any repairs or upgrades you need to make along the way.

*Information courtesy of the Ontario Real Estate Association.