When buying a home, how much money do you need to have saved?

Everyone seems to know about the main cash requirement when buying a home, the down payment (min. 5% of the purchase price for first-time home owners). But did you know there are other costs associated with obtaining your new home? These are called CLOSING COSTS.

Closing costs are additional costs that buyers may have to pay when they purchase a home. These are typically estimated to be 1.0-1.5% of the purchase price.

10 Closing Costs for Home Buyers:

The 10 most common closing costs associated with buying a new home include:

  1. Mortgage Default Insurance
  2. Home Inspection
  3. Appraisal
  4. House Insurance
  5. Legal Fees
  6. Title Insurance
  7. Prepaid Bills by Seller
  8. Moving Expenses
  9. Utility Service Activation Fees
  10. Mail Forwarding.

The Unavoidable Closing Costs

Some closing costs are optional by the buyer, however, the following are expenses are pretty much unavoidable in most scenarios:

  • Mortgage Default insurance:
    This is required for buyers who make a down payment of less than 20%. The premium can range from 0.5-6.0% depending on the amount of your down payment and application details. This premium is charged on the amount of the mortgage and is typically added onto the mortgage balance.
  • House Insurance:
    Fire insurance is required by Canadian law, effective on possession day. Home insurance rates can vary based on type of property, credit score, location, replacement cost, etc. However, the average home insurance cost for a single detached house in Saskatchewan is approximately $1,100 annually or just over $90/month. (source:ratehub)
  • Legal Fees and Title Insurance:
    These are the costs required to insure and transfer title and review of all documents. Let’s use an example to show you what the estimated legal hard costs would look like for the purchase of a $350,000 home.
Hard Closing Costs for Buyer on a $350,000 House
Cost ($) Closing Cost(s)
$1000 + $110 = $1,110.00 Legal Fees (vary from $900-$1200 typ.) + PST (6%) + GST (5%)
$1050.00 Land Title Mortgage Registration (0.3% of Purchase Price)
$170.00 ISC: Land Titles-Transfer (estimate)
$585.90 6% PST on Mortgage Insurance Premium
$279.00 Title Insurance (Lender & Home Owner Policy)
$15.00 Property Tax Search (estimate)
$25.00 Photocopying (estimate)
$24.00 Title Search (estimate)
$15.00 Courier Estimate
$3,186.40 Total Estimated Legal Fees & Associated Closing Costs
  • Prepaid Bills:
    You may be required to reimburse for any prepaid expenses including property taxes, and utility bills. Your lawyer would advise you if there will be any property tax adjustments payable by you on possession.
  • Service Activation Fees:
    Once you have moved into your new home, you will have to pay activation fess for utilities such as internet (varies based on provider), gas (estimate $15-40), water (estimate $30), and electricity (estimate 25$). A minimum cost of roughly $100.

The Numbers are In:

So, based on a hypothetical purchase price of $350,000 a buyer can expect to come up with approximately $5,000 in closing costs.

Some closing costs are dependent on more than just the purchase price and vary case-by case. However, to avoid any sudden surprises for our buyer(s) once they put an offer in on their new home, we make sure our clients understand these expenses and are prepared for them.



Would you like to discuss in person?

If you would like more information on the items discussed in this blog post we would be happy to chat with you to answer any of your questions.

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