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What is the cost of buying your first home as a Gen Z? Find out the total costs you’re going to pay.
Owning a home—it’s the dream, right? A place that’s yours. No more rent, no more landlords. Free reign to modify your space as you see fit and no risk of eviction for any reason. Buying a home feels like graduation from renting—finally, a place that’s all yours. But just like starting college or university, the loan (a.k.a. your mortgage) is only part of the price tag. Also anticipate hidden fees, surprise expenses and ongoing costs that can add up fast if you’re not prepared.
Know that before you even get the keys, you have to pay closing costs, land transfer taxes, legal fees—and more—you didn’t see coming. And once you move in, say hello to property taxes, maintenance and surprise (!) repairs. In this MoneyFlex column for Gen Z Canadians, I’m breaking down the two major phases of home ownership—before closing and after possession—so you know exactly what to expect and can plan ahead like a veteran home owner.
When most people think about buying a house or condo, they think about the selling price of the property and the down payment needed to secure it.
In Canada, the minimum down payment depends on the home’s price. Here’s what you would need for a down payment:
For example, a $750,000 home requires $25,000 (5% of $500,000) plus $25,000 (10% of the remaining $250,000), totalling $50,000.
If your down payment is less than 20%, then you must obtain mortgage default insurance (CMHC insurance) in Canada, which is added to the mortgage and increases your costs based on the loan-to-value (LTV) ratio. (To figure that out, you divide your mortgage amount by the purchase price of the home. Your mortgage amount is when you subtract your down payment from the purchase price.)
As of 2025, the standard CMHC insurance premiums are:
Here’s how it works. Say you purchase a $750,000 home with a 10% down payment ($75,000), your mortgage would be $675,000. The 3.10% premium would add $20,925 to your mortgage, bringing the total loan to $695,925. The premium is typically rolled into the mortgage and paid off over time. Try MoneySense’s mortgage insurance calculator and input your own mortgage numbers.
Now, if you can hold off until you save enough for a 20% downpayment, Certified Financial Planner Evan Parubets says you’ll be glad you did. “It’s actually way worse than you initially thought because by adding it to the mortgage, you’re paying interest on the CMHC fee for the next 25 or 30 years of the life of the mortgage. And if you calculate how much it is—depending on what interest rates are—it’s probably anywhere from two to three times the original value.”
So, let’s go back to the example of a $750,000 home with a 30-year amortization at a 5% interest rate. Your $20,925 CMHC premium would cost approximately $40,439—double the amount—when accounting for interest over time.
And just when you think you’ve got the mortgage costs figured out, another hefty closing cost comes along: land transfer taxes. First-time home buyers get a rebate but not a pass. Across Canada—except Alberta and Saskatchewan—land transfer taxes are a one-time cost paid by the buyer at closing time and calculated as a percentage of the home’s purchase price. Rates vary by province, and some cities (like Toronto, Vancouver and Halifax) impose additional municipal taxes, adding to the bill.
Let’s use that $750,000 home example again, but in Toronto for a first-time buyer. Your land transfer taxes alone will amount to $14,475—try this land transfer tax calculator—thanks to the municipal tax on top of the provincial one. So, on top of the purchase price, you’ll need a 10% down payment plus default insurance ($20,925 since you’re putting down less than 20%). Add in that $14,475 land transfer tax bill, and you’re looking at a significant sum. Parubets refers to the transfer tax and default insurance as “The Big Two.”
There are still other closing costs to factor in before you even get the keys to your new home. Property taxes and home insurance are two other key costs to plan for.
For a $750,000 home in Canada, annual property taxes can range from $2,000 to $14,000, depending on the location and tax rates (check your municipality or province or territory website for accurate numbers). As the buyer, you’re responsible for a prorated portion based on the closing date, which means the seller covers up to closing, and you pay the rest of the year. Home insurance must be purchased before you move in. Premiums usually range from $780 to $1,250 annually, depending on the home’s value, location and coverage needed (for example, overland flood insurance).
And finally, smaller closing costs may include a home inspection (typically $300 to $600) and legal fees (ranging from $500 to $2,500).
Most closing costs—like the down payment, legal fees and home inspection—need to be paid out of pocket (not part of your mortgage). However, expenses like mortgage default insurance (if required) and property taxes (once set up with your lender) can be rolled into your mortgage payments. Basically, if it’s a service fee (legal or inspection, for example), expect to have to pay it upfront. The costs after you close on your property.
Once you’ve closed on your new home (you’ve officially sealed the deal—signed the papers, paid what you owe, and get the keys), it’s a huge step, but the money train doesn’t stop there. There are still plenty of expenses to consider. And here they are.
Moving costs: Depending if you hire professional movers or take a DIY approach, moving costs can vary. Hiring movers can cost from $300 to $2,500, depending on where you live as well as the distance and complexity of your move. If you opt for a rental truck, you might pay anywhere from $100 to $300 for the day, plus gas. And don’t forget about packing materials—boxes, tape and bubble wrap can add another $100 to $200.
Utilities and setting up: The setup fees for essential services—such as electricity, gas, water and internet—can cost between $300 and $500. Ongoing utility bills vary widely, with an average monthly range of $200 to $400. Expect seasonal heating and air conditioning costs to spike during peak winter and summer months.
Home repairs and immediate upgrades: It’s not uncommon to run into immediate and sometimes urgent repairs when moving in, such as fixing a leaky faucet or servicing or even replacing appliances. Immediate home repairs can cost anywhere from $100 to $1,000 and upward, depending on the issue, and new appliances can cost in the thousands. If you plan to make home upgrades, such as fresh paint or new furniture, this can add significant costs, ranging from $500 to $5,000, depending on the scale.
Home owners’ association fees: If your home is part of a community with a home owners’ association (HOA)—think condo and townhouse living—fees can range from $100 to $1,000 per month to cover landscaping, snow removal, and upkeep of common areas and amenities such as pools, gyms and shared spaces like party rooms and terraces.
Regular maintenance and lawn care: Finally, routine maintenance, such as lawn care, gutter cleaning and seasonal upkeep, should also be budgeted for. (Use MoneySense’s free Excel template for your monthly budget to plan ahead for housing costs.)
Knowing how much you can borrow (and likely be approved for) is a good idea. You can use the MoneySense mortgage affordability calculator. You can also check this table to compare mortgage rates in Canada right now.
Parubets suggests setting up a savings account before diving headfirst into home ownership. Save the equivalent of these new costs as part of a trial period. Then, he says to calculate the mortgage monthly payment and factor in additional expenses, like property taxes, utilities and other costs from homeownership.
Let’s say your mortgage comes to $5,000 per month. If you live with your parents, your housing costs are essentially $0. If you’re renting, perhaps you’re paying $2,000 a month. That means the jump to home ownership would add an extra $3,000 per month to your budget.
The best way to prepare: Start setting aside $3,000 a month now to see if you can comfortably handle the financial commitment before making the leap. “Because—if you can’t afford it or if it’s crippling your lifestyle and you’re like, ‘I don’t want this,’—then what are you doing buying a home? This will be your life for the next 25 to 30 years,” Parubets says. Of course, with experience and promotions, your income will increase, but that doesn’t happen overnight. And the cost of having kids is another cost to factor. “That’s a whole other MoneySense article,” he jokes. (And it is: “How much does it cost to raise a child in Canada?”).
If you realize you can’t handle that $3,000 a month, the good news is you can simply pause on the goal and reconsider buying a home. However, once you’ve purchased a home, there’s no easy way out without facing financial consequences like default, going into debt or having to sell. This save-before-you-buy approach acts as a test run, offering a valuable reality check.
Plus, the added benefit of aggressive saving results in a larger down payment, which reduces CMHC costs—bringing you one step closer to home ownership in a more financially secure way. A win-win.
Parubets says housing costs should be your top priority, but they shouldn’t come at the expense of other financial goals in your life. One day, you will potentially pay for your children’s education, buy a car, invest in life insurance and eventually retire. To make home ownership sustainable for you, your discretionary spending (eating out, going on vacation) will likely take the biggest hit. That’s why timing your home purchase is so important.
Beyond the financial side, Parubets emphasizes the need to consider why you want to buy a home in the first place. Is it a milestone that makes you feel like you’ve “made it”? Is it a status symbol? A tradition passed down from your parents? All are valid reasons, but they must be weighed against the financial strain home ownership can bring. Ultimately, the key to making a home purchase work isn’t just affording it on paper—it’s ensuring the lifestyle trade-offs are worth it. And that starts with planning, not scrambling after you buy.
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