XEVA Mortgages                                                                                                       patricia@patriciacollins.ca | Cel: 604.996.7701 | Fax: 604.343.7111 | Follow Me: Facebook Facebook Twitter Tumblr


I’m a first-time home buyer... what costs can I expect?

Firstly, you need to come up with the down payment. If you have less than a 20% down payment (a high- ratio mortgage) you are required to pay a mortgage insurance premium to have your mortgage insured against default.  The minimum you must put down on a property you intend to live in is 5%.  Rules have now changed for investors, and the minimum you must put down when purchasing a rental property is now 20%.  If you are purchasing a 2nd home, or a property for a family member (i.e. purchasing a condo for your children, or a property for a parent), this is considered a 2nd home and the 5% down payment rule applies.

In addition to the purchase price, be prepared for additional ‘closing costs’ associated with your home purchase. Depending on the size and value of your home, your combined closing costs can range from a few hundred dollars to a few thousand dollars. The general rule of thumb and what lenders ask to see in your account is 1.50% of the purchase price.  Your Real Estate Agent, Lawyer or Mortgage Broker can help you estimate these costs. 

If you are a first time homebuyer, this amount will be less if your purchase is under $750,000 as you will be exempt from having to pay the property transfer tax.  For more information on PPT exemptions, see https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions.  PPT for all other home buyers in B.C. will be 1% on the first $200,000 of the purchase price, 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, 3% on the portion greater that $2.000,000, and an additional 2% on anything over $3M.

Closing costs may include:

  • High Ratio Mortgage Application fee (if applicable)
  • Mortgage Default Insurance
  • Appraisal fees
  • Legal fees
  • Survey fees
  • Home Inspection fees
  • Land transfer tax (or Provincial tax)
  • GST (on newly constructed homes)
  • Insurance
  • Property taxes and utility bills that the previous owner has prepaid
  • Moving expenses
  • Additional expenses (gas, hydro, cable, phone, repairs, renovations, appliances, furniture, etc.)

Buying a home is one of the biggest financial decisions you will make. It’s important that you are making an educated decision with someone looking out for your best interest. Call us today!