The Hidden Costs of Buying a Home

The Hidden Costs of Buying a Home

Buying a home is one of the most exciting milestones in life… But it’s also one of the most complex financial transactions you’ll ever make. Between house hunting, mortgage approvals, and getting excited about the big move, it’s easy to focus solely on your down payment and purchase price. But the truth is, there’s a lot more to the cost of homeownership than what you might have thought.

There are many “hidden” costs that can appear throughout the process, and if you don’t plan for them, they can throw your budget off balance very quickly. But here’s the good news –  understanding these extra costs ahead of time ensures you’re financially prepared for every step of your home-buying journey. And we’re going to help you get started.

Here’s what to expect when it comes to the often-overlooked costs of buying a home.

Land Transfer Taxes and Legal Fees

Land transfer tax is one of the first costs you’ll encounter beyond the purchase price of your home. In most provinces, this tax is applied whenever property changes hands, calculated as a percentage of the home’s purchase price. Each province sets its own rate, and some municipalities (like Toronto) add an extra municipal tax on top. The good news? Many provinces, including Ontario & British Columbia, offer rebates for first-time homebuyers after meeting certain conditions.

Alongside your land transfer tax, you’ll need to budget for legal fees. A real estate lawyer is an essential part of Canada’s home-buying process, and they will ensure everything is properly taken care of. You’ll also need to budget for disbursements – fees/costs that will come up during the process, including things like title searches and office expenses. Before you dive in, have a sit-down with your lawyer to go through these, find out what is included, and get an idea of what the fees will look like

Title Insurance and Appraisal Fees

Title insurance is another important cost that protects both you and your lender. It covers you in case there are issues with your property title, like undiscovered liens, boundary disputes, or unpaid utility bills. Even if your lender doesn’t require it, purchasing your own policy provides peace of mind as you move forward.

Appraisal fees are another cost that can sneak up. Before finalizing your mortgage, most lenders require a home appraisal from a licensed professional to confirm that the home’s value matches the agreed purchase price. 

These fees might not seem like a big deal, but they’re important for protecting your investment and securing your financing.

Home Inspection and Property Survey

A home inspection is one of the smartest decisions you can make before finalizing your purchase. It gives you an unbiased look at the property’s condition, identifying potential problems, like roofing issues, water damage, or plumbing concerns, before they become costly surprises – and your problem. It’s a small price to pay for avoiding potential thousands in unexpected repairs.

You may also need a property survey to verify boundaries and confirm that all structures (like fences, sheds, and decks) are legally situated on your new property. Most lenders will require this – and it’s well worth it if you’re planning future additions or want clarity about your lot lines.

Moving Expenses and Utility Setup Fees

Moving into your dream home isn’t free, even if you DIY it, and the costs can add up faster than you’d expect. Professional movers, rental trucks, gas, boxes, and other moving supplies can pile up quickly; shop around to find the best options that fit with your budget and your moving needs.

As you get closer to your move-in date, you’ll also need to set up your utilities. Deposits or connection fees may be required for services like hydro, gas, water, internet, and cable. Planning these transfers in advance ensures everything is up and running on move-in day without any surprises.

Post-Closing Costs and Ongoing Maintenance

Once you have the keys, you can start celebrating… But keep in mind that a few expenses are going to keep popping up. Post-closing costs include everything you’ll need to make your new house a perfect home; think furniture, décor, small renovations, and general maintenance.

If your new place needs a fresh coat of paint, updated appliances, or new flooring, those costs can quickly add up. Even small fixes, like patching drywall, replacing light fixtures, or upgrading window coverings, can add thousands to your final total before you know it.

It’s also important to set aside a budget for regular home maintenance. Industry experts recommend saving 1–3% of your home’s value each year for ongoing upkeep. That means for a $700,000 property, you should plan to set aside at least $7,000 annually to cover both the expected and unexpected – things like roof repairs, plumbing maintenance, or seasonal servicing of your furnace and air conditioning.

Property Taxes and Home Insurance

Once you’ve moved in, property taxes and home insurance become recurring costs that are easy to underestimate – especially when they can fluctuate.

Property taxes are determined by your municipality and depend on your home’s assessed value. If your lender collects taxes on your behalf, this amount may be included in your monthly mortgage payment, so it’s important to know exactly what’s being covered.

Meanwhile, home insurance protects your property from fire, theft, and other damage and is required by lenders before they’ll release mortgage funds. Premiums vary based on the home’s value, location, and coverage, but will give you peace of mind as you move into your new home.

Planning Ahead

Planning ahead is the best way to avoid surprises when it comes to hidden home-buying costs. Before you start your search, take time to:

• Ask your agent or lawyer for a closing cost estimate. This helps you see the full picture beyond your down payment.
• Save an additional 3–5% of your purchase price to cover extra costs, taxes, and fees.
• Keep some emergency funds available for unexpected repairs or post-move expenses – as much as we hope for a smooth transition, surprises can pop up when you least expect them!
• Review your mortgage pre-approval carefully to understand exactly what is (and isn’t) included.

By thinking ahead and budgeting beyond the sticker price, you’ll start your homeownership journey feeling confident, prepared, and – most importantly – financially secure. Understanding the hidden costs and building them into your budget helps ensure a smoother, less stressful experience from offer to move-in day.

When you’re ready to start your home search, the Coldwell Banker Community Professionals team is here to help you every step of the way – from preparing your budget to finding the perfect property that fits your lifestyle and financial goals. Click here to get started.