The Cost of Buying a Property
The Down Payment: If you have a down payment of 25% or more, you may qualify for a conventional morgage loan which does not require loan insurance. A minimum down payment of 5% is required for a high ratio mortage and you will have to pay to insure it.* *The Government plans to change the rules for these types or mortgages and more information will be added when this is released.
Property Purchase Tax: 1% on the first $200,000, 2% on the balance of the purchase price. This is money that is paid to the Provincial Government.
Conveyance: The legal "stuff". A laweyr or notary public handles all legal details to transfer title from seller to buyer and handles the transfer of monies.
Survey Certificate: Most lenders wil require a survey on single family dwellings.
Appraisal: Some financial instiutions will require an appraisal to determine market value of a property
Building Inspection: This will be the best money you will spend on a purchase. A certified inspector should always be retained as a subject to purchase.
Property Tax Adjustment: This is done by the layer?notary establishing what portion of the years' taxes are apportioned to the seller and buyer.
GST: Tax paid to Federal Government on the purchase of any "new" property
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CMHC
When you require a mortgage for more than 80% of the purchase price of a property, that mortgage must be insued by Canada Mortgage and Housing (CMHC) or GE Mortgage Insurance. The premium charged by these companies decreases as the down payment increases. When you finance your property at 95%, a premium of 3.75% is added to the mortgage. By increasing the down payment to 10% of the purchase price, the premium can be reduced to 2.5%. If you can put 20% down, you can avoid any additional insurance fee. Depending on your situation, there are ways that you can structure this financing to avoid the CMHC or GE insurance premiums.
Please click below for more information from the Provincial Government on Property Purchase Tax for first time home buyers:
FirstTimeHomeBuyer.pdf