When you think about purchasing a home in Canada, there are things to consider beyond the location and the listing price. Owning a house has several hidden costs that can increase your debts if you are not careful. That’s why when you start house hunting, you should calculate the monthly costs of owning a house. To help you out, we have created a list that will allow you to determine the amount you will have to pay every month, as a homeowner.

The first thing that you need to understand is that the cost of owning a house in Canada divides into two groups. The one-time costs, which are usually things you need to pay when you are in the process of purchasing the property. Then, you need to think about the ongoing costs. Keep in mind that the later ones you’ll probably have to take out of your income every month.

Since there are several costs you should plan for before owning a house. Below we will divide the monthly fees of owning a house into different sections. That way, it will be easier for you to calculate how much money you will need depending on your situation.

One-time fees associated with owning a house in Canada

These one-time fees are not part of the monthly costs of owning a house. However, it is crucial to understand them before deciding to purchase a property. If you want to become a homeowner, chances are you already heard about some of these fees, while others might come as a surprise. However, there is no need to panic because we are going to explain everything.

1. Deposit

Sometimes depending on the market conditions and on the property you want to purchase, you might have to pay a deposit. In that case, there is not an established amount you will have to pay. That’s why you should ask your real estate agent to help you calculate the deposit. The great thing about paying a deposit is that you will make sure another buyer doesn’t take the home from you. Plus, the amount will be part of your down payment.

2. Down payment

The downpayment is a cost that you will have to pay upfront, which means this will not be taken out of your mortgage. This value is different for every homeowner since it depends on the purchasing price of the home. Usually, it is recommended to save up to 20 percent, even though in some cases you could only end up spending five percent.

3. Mortgage insurance

A mortgage default insurance is a cost that you might have to pay depending on your circumstances. For instance, if, for some reason, your lender is not sure you’ll be able to make all the payments, you will need insurance.

4. Moving expenses

If you are moving from your first home to a new property, chances are you will want to bring all your furniture and appliances. You could ask your friends to help you out, rent a larger vehicle or hire a moving company. Depending on what you choose, make sure you keep that cost in mind before thinking about moving.

5. Closing costs

These are several fees you will have to pay before you get the keys to your new home. The most common closing costs include land transfer tax, title insurance, home inspection, legal and appraisal fees. If you want to plan ahead, we recommend saving four percent of the purchasing price to pay the closing costs.

Costs of owning a house in Canada

In this section, you will find a list of the monthly costs of owning a house. Keep in mind that we are not including specific scenarios such as natural disasters or home renovations.

1. Mortgage payment

Your mortgage will be the heaviest expense every month. That’s why before you purchase a home, make sure you have a fund to cover at least the first three months.

2. Home insurance

Home insurance is something you will need to have before purchasing a new property since it will be a requirement of your lender. The price of your home insurance will be determined by different factors. Some of these include your location, the replacement cost, potential hazards, among others. Before picking a company, ask for several quotes and compare what each insurance covers.

3. Property tax

Property taxes are a cost that you will only need to pay once per year. The amount of property tax will be determined by your municipality. In general, you can expect property taxes to be 0.50 to 2.50 percent of the market value of your home. Paying your property taxes is important since that money is used for road maintenance, policing, fire protection, street lighting, snow, and garbage removal.

4. Condo fees

Unless you are planning to purchase a detached home, chances are you will have to pay condo fees every month. Usually, the condo fees also cover part of your utilities. However, that ultimately depends on your condo association. On average, in Toronto, you can expect your condo fees to be $0.50 per square foot.

5. Utilities

The utility cost will include power, water, sewer, and heating services. The utilities’ total value can vary depending on the type of system of the property. If you are part of a condo association, it is important to ask your realtor which utilities are covered under the condo fees. That way, you can calculate which services you will have to cover.

6. Cable, phone, and internet

All these costs can be high or low, according to what you need. For instance, the majority of people don’t have a landline because they only use their cellphone. Also, some homeowners don’t even bother to look for cable companies since they pay for streaming services. Overall, cable and phone are optional, but in this modern world, an unavoidable cost is Wi-Fi. Several companies offer this service. That’s why you should ask for several quotes before making a decision.

7. Maintenance

If you live in a condo, you won’t have to worry about maintenance since it is included in your condo fees. Otherwise, you will have to cover the whole maintenance cost, including snow removal, upkeep, and repairs. The cost of maintenance will be three to five percent of the value of your home per year. This means you can end up paying between $1,000 to $2,000 a month.

8. Emergency fund

Even though we have covered the majority of monthly costs, there are unexpected situations nobody plans for. That’s why you need to have an emergency fund in case an accident happens or maybe if you want to do a renovation. Also, this emergency fund can protect you if you find yourself without a job for several months.  

The cost of owning a house in Canada every month will be at least $2,500, depending on your type of property. However, if you want to have an accurate amount, go through our list and add up all the ongoing costs mentioned above.