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Expense-wise, there's more to owning a home than that mortgage payment every month. Homeownership costs fall into two categories:
One-Time Costs
Below are some of the costs you can expect to pay at or around the time you purchase your home:
- Closing Costs and other Additional Home Costs. The closing costs you pay will depend in part on your mortgage and the province in which you buy. You may also need to pay for an appraisal and a new survey of the property. If you're buying new construction, you may have to pay a new home warranty fee. Your lawyer or notary will be able to give you details of these costs.
- Moving Costs. Whether you hire movers to pack, transport and unpack your possessions or you do it all yourself, you'll incur costs. (Visit our Moving section for all kinds of moving tips.)
- New Home Costs. Think of all the things you want and need to make your new home feel like home (especially if it's your first). Then think of the things you need (such as cleaning supplies) just to get moved in. These short-term costs all add up, so try to tally up and factor them into your initial costs. If cash is tight, you can always consider a Royal Credit Line® or RBC Visa† to help cover these expenses.
Regular Recurring Costs
These are some of the costs you can expect to pay monthly, quarterly or sometimes seasonally:
- Mortgage Payment. This will probably be your largest monthly cash outlay. Several factors-the amount you financed, term and rate, amortization and payment schedule-affect the amount of your payment. If you'd like to pay off your mortgage sooner and reduce your interest costs consider paying more frequently, such as accelerated biweekly payments (to match up with your pay). Even adding a little bit to your monthly payments or making one extra payment per year can put a dent in your mortgage.
- Property Taxes. Depending on your location, you'll get a property tax bill two, three or four times a year. Nowadays, you can usually pay your tax bill by a variety of methods: a cheque to your municipality, through online banking or (if your municipality allows) automatic debit from your chequing account.
- Property Insurance. Your lender will require that property insurance is in place at closing, but it's an ongoing expense for as long as you own your home. Property insurance protects the replacement value of the structure if something unfortunate were to happen. Your coverage should also protect your valuable personal items, such as jewellery, artwork, furniture and computers. Property insurance should also protect you against personal liability should anyone be injured while visiting your property or should you accidentally damage a neighbour's property. (Every few years, make sure your coverage is up-to-date with your property's value.)
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RBC Insurance® offers property insurance. Request a free and confidential quote online today. |
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- Condominium Fees. If you buy a condo/strata unit, your costs will probably include a monthly fee to help pay for interior/exterior maintenance and upkeep of the common grounds and public areas. Get all the details about fees and other costs from the property manager or condominium association before you buy. Learn about buying a condo.
- School Taxes. Some municipalities integrate school taxes into the property taxes; others collect them separately. In the latter case, you'll usually pay school taxes for the upcoming academic year in a single payment at the end of the current school year.
- Utilities. Each month you'll pay bills for heating, gas, electricity, water, telephone and cable (or satellite dish).
- Maintenance. A well-maintained property helps to preserve your home's market value, enhances the neighbourhood and could add to the worth of your property. Sometimes these expenses are the easiest to put off. But if you neglect some maintenance tasks, you may find yourself faced with significantly greater costs for repairs down the road. Maintenance ranges from lawn care and snow removal to roof repairs and regular heating system maintenance. Learn more about maintaining your home.
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