Owning a home — it’s a milestone many aspire to: a place that’s truly yours, free from rent increases and landlords, with the freedom to renovate and decorate as you wish. But while the mortgage is the biggest single expense, it’s far from the only one. Hidden fees, upfront costs and ongoing expenses can add up quickly if you don’t plan for them.
Before you get the keys you’ll face closing costs, land transfer taxes, legal fees and other upfront charges. After possession, expect property taxes, insurance, maintenance and unexpected repairs. This guide for Gen Z Canadians explains the two major stages of buying a home — before closing and after possession — so you can budget realistically and avoid surprises.
What to budget for before you close on the property
Most buyers focus on the purchase price and the down payment, but there are several additional expenses to include in your budget.
In Canada, the minimum down payment is determined by the home price:
- 5% on the first $500,000
- 10% on the portion between $500,000 and $1.5 million
- 20% on the full purchase price for homes over $1.5 million
For example, a $750,000 home requires $25,000 (5% of $500,000) plus $25,000 (10% of the remaining $250,000), for a total down payment of $50,000.
If your down payment is under 20%, you must purchase mortgage default insurance (commonly called CMHC insurance) in Canada. The premium is added to your mortgage and increases your overall loan based on the loan-to-value (LTV) ratio. Your LTV equals your mortgage amount divided by the purchase price (mortgage amount = purchase price − down payment).
As of 2025, standard CMHC insurance premiums are approximately:
- 5%–9.99% down (90.01%–95% LTV): 4.0% of the mortgage
- 10%–14.99% down (85.01%–90% LTV): 3.10% of the mortgage
- 15%–19.99% down (80.01%–85% LTV): 2.80% of the mortgage
Example: Buy a $750,000 home with a 10% down payment ($75,000). Your mortgage would be $675,000. A 3.10% CMHC premium adds $20,925 to the mortgage, bringing the total to $695,925. Because the premium is rolled into the mortgage, you pay interest on it over the life of the loan, which can substantially increase the total cost.
Certified Financial Planner Evan Parubets warns that mortgage insurance can more than double the effective cost of the premium when interest over 25–30 years is included. In our $750,000 example with a 30-year amortization at a 5% rate, a $20,925 premium could cost roughly $40,439 after interest — significantly more than the upfront fee.
Another major closing expense is land transfer tax. Except for Alberta and Saskatchewan, Canadian provinces charge a one-time land transfer tax at closing, calculated as a percentage of the purchase price. Some cities, including Toronto, Vancouver and Halifax, add municipal transfer taxes on top of the provincial fee. First-time buyers may qualify for rebates, but they still typically pay substantial amounts at closing.
Using the same $750,000 example for a first-time buyer in Toronto, land transfer taxes alone can total roughly $14,475 because municipal tax is added to the provincial tax. That means, in addition to your down payment and CMHC premium (if applicable), you’ll need to cover transfer taxes and other closing costs.
Other upfront costs to plan for include:
- Property taxes (prorated at closing): annual amounts vary widely by municipality and location
- Home insurance (required before moving in): typical annual premiums range depending on coverage and risk factors
- Home inspection: typically $300–$600
- Legal fees and registration: typically several hundred to a few thousand dollars
Most of these closing costs — down payment, legal fees and inspections — must be paid out of pocket before or at closing. Some recurring costs such as property taxes and CMHC insurance (when rolled into the mortgage) will be paid over time as part of your mortgage payments.
Costs after you close: ongoing and immediate expenses
After closing, the monthly and occasional costs continue. Key items to include in your monthly budget:
Moving costs: Hiring professional movers can range from $300 to $2,500 depending on distance and complexity. Renting a truck might cost $100–$300 for a day, plus fuel; packing supplies often add $100–$200.
Utilities and setup: Initial setup fees for electricity, gas, water and internet can be $300–$500. Monthly utility bills typically range from $200 to $400, with seasonal spikes for heating and cooling.
Immediate repairs and upgrades: New homeowners often encounter small repairs when moving in — from a leaking faucet to appliance servicing. Initial repairs can range from $100 to $1,000 or more. Upgrading or furnishing a home can cost several hundred to several thousand dollars depending on the scope.
Condo or homeowners’ association (HOA) fees: If your property is part of an HOA or condo corporation, fees can range from about $100 to $1,000 per month, covering shared amenities, maintenance, landscaping and snow removal.
Routine maintenance and lawn care: Budget annually for lawn care, gutter cleaning, seasonal maintenance and ongoing upkeep. These recurring tasks add up over time and protect your investment.
Can you afford a mortgage?
Before committing, use a mortgage affordability calculator to estimate how much you can borrow and what monthly payments will look like. Compare mortgage rates and consider your income stability, debt levels and future goals when deciding what you can afford.
How to prepare to buy your first home
Parubets recommends opening a dedicated savings account and running a “test” month where you save the full difference between your current housing cost and the expected mortgage payment. For example, if a new mortgage would be $5,000 per month and you currently pay $2,000 in rent, try saving the $3,000 difference each month for several months to see whether you can sustain that lifestyle change.
This practice helps you gauge whether the new payment is realistic and gives you time to grow a larger down payment, which reduces mortgage insurance costs and overall risk. Aggressive saving not only prepares you for closing costs but can also lower your monthly payments and long-term interest expense.
Parubets also urges buyers to weigh their reasons for owning a home. Buying for status or habit without considering the financial trade-offs can lead to stress. Home ownership should be a balanced decision that fits your financial plan and long-term goals — including saving for children’s education, buying a car, life insurance and retirement.
Ultimately, careful planning, realistic budgeting and a clear understanding of both upfront and ongoing costs are the best ways to make home ownership sustainable and rewarding.
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Read more on home ownership:
- What it’s like to be a first-time home buyer in Ontario—for real
- Unsure about buying a home? Why you should open an FHSA now anyway
- Read this before applying for the First-Time Home Buyer Incentive
- How changes to the Home Buyers’ Plan could affect your down payment