A breakdown of closing costs when buying a home or investment property in Ottawa.

Buying a home is most likely the biggest purchase you’ll make in your life. It’s also the smartest, and one that will bring financial security. The process itself can be daunting, and we highly recommend working with an agent to walk you through the steps. Being aware of the costs involved will remove the financial fears and surprises and make this exciting time more gratifying.


Quite often there will be costs or taxes that you might not include when you're running your numbers and if you're on a tight budget, any surprise fees could mean make or break. ⁣If you’re looking to purchase as an investment property, you’ll want to know all of the costs included so that you have an accurate understanding of your return on investment. We often hear that you need to spend 1.5% - 4% of the purchase price on closing costs. Let’s break down what that means. 


Purchase Price/ Down payment - you most likely get a mortgage so you need to put down the down payment. This is the one item on the closing costs list that seems to go without saying, but there is so much more to it.

Deposit: The deposit is rolled into your down payment, and is required at the time you submit an offer on a home or property. The deposit signals to the seller that you’re financially capable to purchase  and a serious buyer who’s committed to  that purchase.  There is no minimum deposit required, however; if you find yourself in a bidding war, a healthy deposit could make-or-break the deal for you.
GST/HST on New Builds- New build homes require GST to be paid. Some builders roll this into the price of the home unless the home is being purchased as an investment at which point you will need to pay this upon closing - up to a maximum of $25,000.  It’s important to find out whether the GST is included in the price.

Land transfer Tax- This is a fee you pay to register your property under your name. This must be done before closing and usually costs about 1.5% of the purchase price.

Lawyer Fees- These fees need to be paid on the day of closing. A lawyer will protect your legal interests and ensure the home does not have a lien against it They will also prepare the apportionments- the taxes payable will change depending on what the previous owner has already paid. Or in the case of a condo, any condo fees the previous owner paid up-front need to be reimbursed. The lawyer will calculate these and reimburse, and add to your fee.  They will review all the contracts before they’re signed etc. Depending on what they  are required to do, the fees will  typically be anywhere between $400- $2500.

Home Inspection- A home inspection is often recommended to include as a condition in the offer to purchase a home. A home inspector will write up a detailed report on the condition of the home including the electrical, plumbing, roof, foundation and  moisture levels, etc.. This inspection can cost up to $500 depending on the size and intricacies of the home.

Home appraisal- If you are using a mortgage lender, they may require that you provide a home appraisal as part of the process of securing a mortgage. They look at the market value of the area as well as the details of your home to find an estimate on the value.. This can cost anywhere between $300 - $500, and sometimes  is covered as part of the fee charged by the mortgage lender, so it is important to find out.

Miscellaneous Moving Costs:  It’s not just the buying process you need to budget for, it’s also the cost of moving. It’s always best to add  moving costs to your overall budget, as they’re unavoidable. Many of these costs can be negotiated and have wiggle room, unlike the other closing costs.  However, it’s important to budget for them in order to avoid any surprises which cause financial strain. Moving costs might include anything from,
the moving truck or moving company, boxes/ tape and packing supplies (plus the traditional beer & pizza for friends who help), Storage units (if required) and Redirecting mail 

Home Insurance-While home insurance is not required by law, it is necessary. Unless you are buying your home without a mortgage, your lender will require the insurance as part of the terms. It is very difficult to estimate the cost of home insurance, as it fluctuates greatly depending on the home, the neighbourhood and regional differences that may affect the likelihood of flooding or fires. Factors of the home could be the age, plumbing, electrical details, the roof etc. An insurance broker will assess the risk and be able to provide a quote, the higher the risk to the home, the higher your premiums will be.


Buying a home can be a complex process, it’s always best to reach out to a professional to help prepare you for the emotional roller coaster it can be. It also helps to be fully prepared financially so you never run into any surprises that can impact a purchase, and be demoralizing. Don’t allow for any hidden costs, be prepared and you’ll not have any uncertainties or fears. Work alongside an agent and they’ll keep you informed about all upcoming costs, timelines and work with you to review your budget on an ongoing basis as you look for your future home - reach out to our trusted Mortgage Broker.



The Home Guyz Team w/Solid Rock Realty Brokerage