What Costs Do Buyers Forget When Buying a Home in Peterborough?
Buying a home is one of the biggest financial steps most people take. The down payment gets most of the attention, but there are several other costs that catch buyers off guard. If you are buying in Peterborough or the Kawarthas, here is a closer look at the expenses that often get overlooked.
Closing Costs Add Up Quickly
A common planning range for closing costs in Canada is about 1.5% to 4% of the purchase price. On a $500,000 home, that could mean $7,500 to $20,000 on top of the down payment. These costs include legal fees, title insurance, land transfer tax, and various adjustments.
Land Transfer Tax
In Ontario, buyers pay a provincial land transfer tax based on the purchase price. First-time buyers may qualify for a refund of up to $4,000. This is worth checking early so it does not come as a surprise at closing.
Legal Fees and Disbursements
A real estate lawyer handles the title search, registration, mortgage documents, and closing. Legal fees typically run between $1,500 and $2,500 or more, depending on the complexity of the deal.
Title Insurance
Title insurance protects against issues like fraud, survey errors, or unknown liens. Most lenders require it. The cost is usually a one-time premium paid at closing.
Home Inspection Costs
A home inspection typically costs between $300 and $600, depending on the size and age of the home. Skipping it to save money can lead to much bigger expenses later.
Appraisal Fees
Some lenders require an independent appraisal to confirm the property value. This usually costs between $300 and $500.
Property Tax Adjustments
If the seller prepaid property taxes, the buyer may need to reimburse the seller for the portion that applies after the closing date. This adjustment is handled through the lawyer.
Mortgage Insurance (CMHC)
Buyers with less than a 20% down payment are required to pay mortgage default insurance. The premium is typically added to the mortgage but is still a real cost that affects your monthly payment.
Moving and Setup Costs
Moving costs, utility hookups, mail forwarding, lock changes, and basic home supplies all add up. Even well-kept homes may come with small early costs such as paint, minor repairs, or appliance updates.
Insurance
Home insurance is required by lenders before closing. Premiums vary based on the home type, location, and coverage level. Shopping around before closing day is a good idea.
Budget Beyond the Down Payment
The down payment is only part of the upfront cost. Buyers also need to think about legal fees, title insurance, inspection costs, appraisal fees, tax adjustments, moving costs, insurance, and setup expenses. Building a buffer into the budget helps avoid stress at closing time.
About the Author
Frank Rosso, ABR, SRS is a Realtor serving Peterborough and the Kawarthas. He helps first-time buyers, move-up buyers, downsizers, and investors make practical real estate decisions with local market knowledge, clear communication, and strong negotiation support.
FAQ
How much should buyers budget for closing costs in Canada?
A common planning range is about 1.5% to 4% of the purchase price, on top of the down payment.
Do first-time buyers get a land transfer tax refund in Ontario?
They may. Eligible first-time buyers in Ontario can qualify for a refund of up to $4,000 on provincial land transfer tax.
Are property tax adjustments part of closing costs?
Yes, they can be. If the seller prepaid taxes, the buyer may need to reimburse the seller for the portion that applies after closing.
Do buyers need to budget for repairs right after moving in?
Often, yes. Even well-kept homes may come with small early costs such as lock changes, paint, minor repairs, or appliance updates.
Is the down payment the only major upfront cost?
No. Buyers also need to think about legal fees, title insurance, inspection costs, appraisal fees, tax adjustments, moving costs, insurance, and setup expenses.