Step #2: Determine What You Can Afford

Purchasing a new home involves two costs - "one-time" costs and "monthly" costs - the initial amount you will need for your purchase and the ongoing costs of paying back your mortgage along with monthly operating costs. The largest one-time cost is the down payment. It usually represents 5-10% of the total price of the property.

Typical One-time Expenses:


Time of Payment

Mortgage application & appraisal fee

Time of Appraisal

Property inspections (optional)

Time of inspection

Property survey (sometimes provided by seller)

Time of survey

Legal fees & disbursements

On closing date

Property title insurance

On closing date

Home and property insurance

On closing date

Mortgage Insurance

On closing date

Adjustments (Taxes, strata fees, etc.)

On closing date

HST on New Homes

On closing date

Property Transfer tax (first-time buyers are exempt)

On closing date

Moving expenses

On date of move

Connection Fees (hydro, telephone, cable, etc.)

On date of move

Typical Monthly Expenses:

  • Mortgage payments
  • Maintenance (strata fees)
  • Property and content insurance (if not paid annually)
  • Property taxes (if not paid annually)
  • Utilities

Obtain a "Pre-Approved" Mortgage

A "Pre-Approved Mortgage" will give you the confidence of knowing exactly how much you can afford to spend on a new home before you start  looking. You will know the maximum amount of financing for which you qualify, and therefore, the price range in which you can afford to look.

You will also be in a much better position to purchase your home once you have found it because you can make a firm offer.

In addition, your interest rate is guaranteed for a certain period of time. You can then shop worry-free, knowing you are protected if rates increase during this period. If interest rates are lower when your home purchase closes, your mortgage will be based on the current rates in effect.

The mortgage application process is much easier than you may think. Most of the time the approval process can be done within 2-3 business days once you have all the necessary documents. We can refer you to a Mortgage Specialist, if you need one, who will provide you with professional advice, and who will customize a mortgage to meet your individual needs and resources.

Once you've figured out your monthly expenses and what you can afford, you can start your search. It could happen that the first home you see is the one you want; or you might look at home after home with none of them catching your interest. Rest assured, the home you're looking for is out there, and when you find it, you're ready to make an offer.