Buying a home is an exciting milestone, but many first-time buyers focus only on the purchase price and mortgage payments—overlooking the additional costs that come with owning property. From maintenance to insurance, the hidden expenses of homeownership can add up quickly.

At Homewise, we believe in helping buyers plan for the full financial picture to ensure they’re not caught off guard after closing. This guide breaks down the hidden costs of homeownership and how to budget for them effectively.

1. Property Taxes

Property taxes are an ongoing expense that varies by municipality and property value. While they may be rolled into your monthly mortgage payments, they can increase annually based on home assessments or municipal rate changes.

How They’re Calculated:

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  • Average tax rates across Canada typically range from 0.5% to 1.5% of the property’s value.
  • Cities like Toronto, Vancouver, and Calgary have different rates that can significantly affect your monthly budget.

💡 Pro Tip: Use your municipality’s property tax estimator before buying to gauge annual costs.

2. Home Insurance

Most lenders require home insurance before approving a mortgage. While protecting your home is essential, the cost varies depending on:

  • Location (flood or fire-prone areas cost more).
  • Home value and size.
  • Coverage level (basic vs. comprehensive policies).

Average Cost:

  • Canadian homeowners typically pay between $1,000 to $2,000 annually for coverage.

💡 Pro Tip: Bundle home and auto insurance to reduce premiums.

3. Utility Bills

Owning a home means taking on full responsibility for utilities—often higher than what you’d pay in a rental. These include:

  • Heating and cooling (gas/electric).
  • Water and sewage.
  • Electricity and internet.

Monthly Estimate:

  • Detached homes may see utility bills ranging from $200 to $500/month, depending on size and energy efficiency.

Tip: Consider energy-efficient appliances and upgrades to lower costs over time.

4. Maintenance and Repairs

A major hidden cost of homeownership is ongoing maintenance. Unlike renting, you’re responsible for fixing leaks, replacing appliances, and keeping the property in good condition.

Annual Maintenance Estimate:

  • Budget around 1% to 3% of the home’s value per year for upkeep.
  • A $600,000 home could require $6,000 to $18,000 annually in maintenance.

Common Expenses:

  • Roof repairs.
  • Furnace and AC servicing.
  • Plumbing and electrical fixes.

💡 Pro Tip: Regular maintenance can prevent costly emergency repairs.

5. Condo Fees (If Applicable)

If you purchase a condo, you’ll be responsible for monthly condo fees that cover:

  • Building maintenance and repairs.
  • Shared amenities (gyms, pools).
  • Reserve fund contributions.

Average Condo Fees:

  • Range from $300 to $1,000+ per month, depending on location and building amenities.

Before buying a condo, review the status of the building’s reserve fund—low reserves can lead to special assessments.

6. Land Transfer Taxes

Land transfer taxes (LTT) apply when purchasing a property. In cities like Toronto, buyers face both provincial and municipal LTTs.

Typical Cost:

  • For a $700,000 home in Ontario, expect to pay around $10,000 to $15,000 in land transfer taxes.
  • First-time buyers may qualify for rebates to offset some of the costs.

Use our land transfer tax calculator to estimate your LTT before purchasing.

7. Legal and Closing Costs

Closing on a home involves fees for lawyers, title insurance, and administrative expenses.

What to Expect:

  • Legal Fees: $1,500 to $3,000.
  • Title Insurance: $500 to $1,000 (protects against ownership disputes).
  • Mortgage Discharge Fees (for switching lenders): $300 to $600.

💡 Pro Tip: Request a breakdown of all closing costs from your lawyer in advance.

8. Landscaping and Snow Removal

Maintaining outdoor spaces comes with its own set of costs, including landscaping, lawn care, and snow removal in the winter.

Average Costs:

  • Landscaping: $1,000 to $5,000 annually (or more for large properties).
  • Snow Removal: $500 to $1,500 per winter (depending on driveway size).

9. Renovations and Upgrades

Many homeowners choose to renovate or upgrade their homes, but these projects can quickly add up.

Common Renovations:

  • Kitchen remodel: $20,000 to $50,000+.
  • Bathroom upgrade: $10,000 to $25,000.
  • Basement finishing: $30,000 to $70,000.

💡 Pro Tip: Focus on renovations that add resale value (kitchen, bathrooms, and curb appeal).

10. Special Assessments

In condos or townhome communities, special assessments can be issued for major repairs or improvements. These fees are often unexpected and can cost thousands.

Example:

  • Roof replacement or facade upgrades may lead to one-time assessments of $5,000 to $20,000 per unit.

Review building documents carefully to avoid surprises.

11. Emergency Fund for Unexpected Repairs

Unexpected repairs—like burst pipes or HVAC failures—can happen at any time. Having an emergency fund is essential for handling these situations without dipping into savings.

Recommended Fund:

  • Aim to set aside at least 3 to 6 months’ worth of housing costs.

How to Budget for Hidden Costs

Step 1: Calculate estimated costs for taxes, utilities, and maintenance.
Step 2: Build these expenses into your monthly budget—treat them as fixed costs.
Step 3: Set up an emergency fund to cover large, unexpected repairs.

Need help budgeting for homeownership? Apply for a mortgage pre-approval and let Homewise guide you through the entire process.

Final Thoughts

Owning a home is a rewarding experience, but being prepared for hidden costs ensures you avoid financial stress. From property taxes to emergency repairs, planning ahead is key to enjoying your home for years to come.

If you’re ready to take the next step, let Homewise help you find the right mortgage and budget for the full costs of homeownership.