Buying a home in Toronto or the Greater Toronto Area (GTA) is an exciting milestone—but many buyers are surprised to learn that the purchase price is only part of the total cost.
Beyond the down payment, there are several hidden costs of buying a home in Toronto & GTA that can significantly impact your budget if you’re not prepared.
As an Ontario mortgage agent, I regularly work with first-time buyers and experienced homeowners who underestimate these costs. This guide will help you understand all the hidden expenses, so you can plan confidently and avoid last-minute stress on closing day.
1. Land Transfer Tax: The Biggest Hidden Cost in Toronto
One of the largest and most overlooked home buying costs in GTA is land transfer tax.
In Ontario, all buyers pay a provincial land transfer tax, but if you’re buying within the City of Toronto, you must also pay a municipal land transfer tax—essentially paying tax twice.
For example:
A $900,000 home in Toronto can trigger over $30,000 in land transfer taxes
Buyers outside Toronto (Mississauga, Brampton, Ajax, Pickering, Milton) only pay the Ontario portion
First-time buyers may qualify for rebates, but these rarely eliminate the full amount. You can review the official rules on the Ontario Land Transfer Tax guide and the City of Toronto Land Transfer Tax page.
2. Legal Fees and Closing Costs
Legal costs are another hidden expense that buyers often underestimate.
Typical mortgage closing costs in Ontario include:
Real estate lawyer fees
Title search and registration
Lender instructions and disbursements
In most cases, buyers should budget $1,200 to $2,000 for legal fees alone.
Planning these costs early—along with your financing—starts with getting a mortgage pre-approval in Ontario which helps you see the full financial picture before making an offer.
3. Mortgage Insurance (CMHC, Sagen, Canada Guaranty)
If your down payment is less than 20%, mortgage default insurance is mandatory. Many buyers don’t realize this is one of the most significant hidden costs of buying a home in Toronto.
Key points to know:
The insurance premium is added to your mortgage
Costs range from 2.8% to 4% of the mortgage amount
It increases both your loan balance and monthly payments
According to CMHC’s official home buying cost guide buyers should always factor this cost into their long-term affordability calculations.
4. Home Inspection and Appraisal Fees
While not always mandatory, these costs are strongly recommended.
Home inspection: $400–$700
Mortgage appraisal: $300–$500 (often required by lenders)
Skipping an inspection to “win” a bidding war can lead to far greater repair costs later—especially in older Toronto homes.
5. Property Tax Adjustments at Closing
Property taxes are prepaid by the seller, but on closing day, the buyer must reimburse their portion.
This adjustment often surprises buyers and can range from $1,000 to $3,000, depending on the property and timing of the sale.
6. Condo-Specific Hidden Costs in the GTA
If you’re buying a condo, there are additional costs many buyers overlook:
Status Certificate fee (around $100)
Potential special assessments
Rising maintenance fees
Higher insurance premiums
Your lawyer should always review the status certificate before conditions are waived.
7. Moving, Utility Setup, and Ongoing Costs
Beyond closing, new homeowners should budget for:
Utility hookups (hydro, gas, water, internet)
Moving costs
Initial repairs and furnishings
These expenses may seem small individually but add up quickly—especially in the first few months of ownership.
8. Choosing the Right Mortgage to Avoid Future Penalties
Not all mortgage costs appear on closing day. Choosing the wrong mortgage product can lead to thousands of dollars in penalties later.
Understanding the difference between a fixed vs variable mortgage rate in Ontario is essential, especially if you may sell or refinance before the term ends.
In some situations, buyers may benefit from learning the difference between a refinance vs purchase mortgage in Ontario to structure financing more strategically.
How to Prepare for Hidden Costs (Practical Tips)
To avoid surprises:
Budget 3%–4% of the purchase price for closing costs
Get pre-approved early
Work with a licensed Ontario mortgage agent
Ask about rebates and incentives for first-time buyers
Review all lender and legal fees in advance
If you’re buying your first home, exploring First-Time Home Buyer Programs in Ontario can help reduce upfront costs and improve affordability.
Final Thoughts
Understanding the hidden costs of buying a home in Toronto & GTA is just as important as finding the right property or interest rate. With proper planning, professional advice, and clear budgeting, you can move into your new home with confidence—without financial surprises.
If you’re planning to buy in Ontario and want a clear picture of your true buying costs, speaking with a mortgage professional early can make all the difference.
