Forty-two per cent of homebuyers faced an unexpected expense in 2025, up from 36 per cent last year, according to a consumer mortgage survey released in May.J Studios/iStockPhoto / Getty Images
If you’re planning to buy a home, you’ll need to know all of the associated costs. Yes, saving for a down payment and getting a mortgage preapproval are key steps, but there are plenty of other costs that could derail your budget and buying power.
According to a 2025 consumer mortgage survey released in May by the Canada Mortgage and Housing Corp., 42 per cent of homebuyers faced an unexpected expense this year, up from 36 per cent in 2024.
The top surprise expenses were immediate repairs and lawyer fees, followed by the land transfer tax, moving expenses and home inspections. These combined costs could easily be in the tens of thousands. The average Toronto home price in June at $1,101,691, for example, would come with a land transfer tax bill of $37,018.
Here’s when these costs crop up during the buying process - and how to prepare for them financially.
Go beyond the home inspection: Getting a home inspection is a crucial step in the buying process, whether it’s provided by the seller, or paid for by the buyer, at a cost of around $500.
This report will include details on what large appliances are included in the sale – think furnace, HVAC system, so on – and whether they are still under warranty. It will go over condition of the roof, and whether the plumbing and electrical are up to code, which in older homes is important since outdated pipe materials, or knob and tube wiring could void your home insurance policy.
However, a home inspector’s findings typically cannot identify problems lurking behind walls or under flooring, such as mould or foundational issues. If such problems are known, the seller is legally bound to disclose them. Otherwise, if the buyer has reason to suspect something, a structural engineer should be brought in to make a deeper assessment.
Unresolved structural issues can also lead to pricey legal disputes after the sale, should the buyer discover a latent defect – one that deems the home unfit for habitation – after the transaction closes, especially if there’s evidence that the seller was aware of the issue and tried to conceal it.
And condo buyers, you’re not off the hook. General maintenance of common areas will be handled by the board and paid for by your condo fees, but it’s important to ensure the interior of your unit – including the plumbing and electrical – is in good shape.
It’s also key to look into the health of the condo’s reserve fund, and whether the property could be due for a special assessment project, since emergency repairs can cost thousands of dollars. This information can be found in the unit’s status certificate, which can be ordered and reviewed by your buying agent.
Have cash to pay your real estate lawyer: Whether you’re buying a new home, selling your property, or changing your mortgage by refinancing or switching to a new lender, you’ll need to pay a real estate lawyer or notary.
They oversee steps such as conducting a title search to confirm there are no liens on the property, registering the property in your name, applying title insurance and ensuring the financial transactions go through on closing day. And they’re the ones who’ll hand you the keys.
The cost of a real estate lawyer is usually around $1,500, and it must be paid out of pocket, since it cannot be rolled into your mortgage.
Do the math on land transfer tax: Depending on where you’re buying your home, you may face a hefty land transfer tax bill or pay very little. Alberta and Saskatchewan have no land transfer tax, while other provinces do. This is another cost that must be paid in cash upon closing.
If you’re a first-time homebuyer, you may be eligible for rebates on this tax. Ontario buyers can receive $4,000 back, for example, with Toronto buyers getting a further $4,475 rebate on the municipal land transfer tax charged by the city. The amount will be determined by your real estate lawyer and be included in your final bill on closing day.
The takeaway here is that while the amount you pay for your home is the headline number, there are other legal and logistical costs that can come as a surprise. Accounting for these will ensure a smoother – and less stressful – homebuying experience.
Penelope Graham is the head of content at Ratehub.ca
