The Hidden Costs First-Time Buyers Always Forget (But Really Shouldn’t)

If you’re buying your first home in Ontario, don’t get blindsided by these surprise expenses.

Buying your first home is one of the most exciting milestones in your life – but it’s also one of the most expensive. While most first-time buyers focus on saving for the down payment, there are several hidden costs that often get overlooked – and they can add up fast.

Whether you’re purchasing a pre-construction condo in Toronto or a starter home in Oshawa, here’s what you need to budget for beyond just the list price.

1. Land Transfer Tax (LTT)

In Ontario, buyers must pay a provincial land transfer tax, and if you’re purchasing in Toronto, there’s an additional municipal land transfer tax.

On a $700,000 home in Toronto, you could pay roughly $20,950 in combined LTT
First-time buyers may qualify for rebates up to $8,475 depending on location

2. Legal Fees & Disbursements

Real estate lawyers are essential to handle paperwork, title transfers, and closing. Expect to pay:

$1,500 to $2,500 in legal fees
This includes title searches, deed registration, and disbursements

📝 Pro Tip: Choose a lawyer who specializes in real estate – it can save you time and money if issues arise.

3. CMHC Insurance (If You’re Putting Less Than 20%)

If your down payment is less than 20%, you’re required to pay mortgage default insurance, typically added to your mortgage.

Premiums range from 2.8% to 4% of the loan amount
On a $500,000 home with 10% down, you could pay an extra $13,950

4. Home Inspection & Appraisal Fees

While not always mandatory, these are highly recommended.

Home inspection: $400–$600
Appraisal (required by lenders): $300–$500

Skipping an inspection to save money can cost you thousands later in repairs.

5. Closing Adjustments (Utilities, Taxes, Condo Fees)

If the seller has prepaid property taxes, condo fees, or utilities, you’ll need to reimburse them on closing.

Budget an extra $500–$2,000 for these “adjustments” depending on the time of year

6. Moving Costs & Setup Fees

It’s not just the mortgage. Think about how you’re getting into your new home and setting up utilities.

Moving truck or service: $500–$2,000
Utility hookups and deposits: $200–$500
New furniture or appliances: varies depending on what you need

7. Home Insurance & Property Tax Escrow

Home insurance is required for closing – expect to pay $1,000–$1,500/year
Your lender may also require prepayment of property taxes into an escrow account

The Bottom Line

While the price tag on your dream home may say $600,000, the true cost of buying is likely several thousand more. These hidden fees often catch first-time buyers off guard, especially in high-demand areas like the GTA, Durham Region, and Hamilton.

By planning ahead and budgeting for these extras, you can avoid surprise bills and feel more confident throughout your homebuying journey.

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