Mortgage Resource Centre

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10 Common Costs Of Owning A Home

While the ongoing costs of owning a home can add up to hundreds of dollars every month, I can help you plan ahead to manage these expenses and be comfortable with your financing

  • Property tax

    Many of the services you’ll enjoy in your new neighbourhood, from parks and recreation facilities to road maintenance and schools, are funded in part by municipal property taxes. Rates vary widely, from region to region and home to home. Annual taxes can top several thousand dollars in urban centres, so some homeowners opt to pay in installments — your lender may provide an option to combine these with your mortgage payments.

  • Energy costs

    If you’re used to keeping the lights on and the thermostat up because utilities are included in your rent, you’ll now have to pay for these costs. Budget to cover monthly gas, electric, or oil bills, which fluctuate with the seasons. Your real estate agent can ask a home’s seller to confirm past costs.

  • Phone, cable, and Internet services

    The costs of being “connected” can easily add up to a couple of hundred dollars a month. Moving into a new home might be a good time to consider whether you need both a land line and a wireless line, for instance, or if you can bundle services for a discount.

  • Home insurance

    Protect your home, its contents, and your property against damage or liability. Prices can vary, depending on your home and neighbourhood, but plan for costs that typically start at a minimum of $500 per year. Keep in mind that a lower cost policy may not offer the comprehensive coverage you may want. You can keep costs down by choosing a higher deductible.

  • Municipal services

    Some municipalities charge fees for services like water or garbage removal. For example, homeowners in some larger urban centers pay $150 to $235 a year for curbside collection of garbage, recycling, and compost.

  • Fuel or transit costs

    If you’ll be commuting a longer distance to work, consider whether you will face higher fuel or public transit costs or whether you’ll have to pay for parking.

  • Monitored security

    If you opt for home protection, monitoring can cost anywhere from $20 to $40 or more per month, depending on the plan.

  • Home maintenance

    Plan to cover all the occasional costs to keep your house in working order, such as changing furnace filters, carpet cleaning, clearing your eavestroughs, and touching up interior or exterior paint. You’ll find it easy to spend $30 or more a month on such home maintenance items and services.

  • Property upkeep

    Consider outdoor areas that may need tending to, such as wooden decks, fences, gardens, and lawns. Even when you do the work yourself, budget at least a few hundred dollars seasonally for items like wood sealant, landscaping supplies, and plants.

  • Repairs

    These are larger, less frequent expenses like replacing the roof, furnace, air-conditioning units, or appliances. Housing experts recommend setting aside 1% to 3% of the value of your house each year — a minimum $1,000 for every $100,000.

How To Leverage Your RRSP's To Buy A Home

Are you in the market for your first home? Dreaming of a space you can call your own? If you are an eligible first time home-buyer, then contributing to your RRSP(s) before the March 1 deadline can help you increase the funds available for your home purchase.

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw from your Registered Retirement Savings Plans (RRSPs) in order to purchase or build your first home. In 2019 there was a change to the HBP in an attempt to provide first-time home buyers with greater access to their RRSP savings by increasing the withdrawal limit from $25,000 to $35,000.

How do I know if I qualify?
In order to qualify, at least one homeowner must be a first-time home buyer, which is defined as the following:
  • You are considered a first-time home buyer if;
    • You have never owned a home before
    • In the last 4 years, you did not occupy a home that you or your current spouse or common-law partner owned
  • You have a written agreement to buy or build a home
  • You are a resident of Canada
  • You intend to occupy the qualifying home as your principal place of residence within one year after buying or building it
  • You have gone through a breakdown of marriage or common-law partnership (even if the other first-time home buyer requirements are not met)
Buying my first home using The Home Buyers' Plan (HBP)

Once you know you can take advantage of the HBP, and have topped up your RRSP(s) (if applicable), make an appointment with me to complete a financial health check to determine what you qualify for. This will make it easier for you to shop the market so you are able to look at real-estate listings within your budget.

Note * The down payment funds must be in your account for a minimum of 90 days for the withdrawal to  qualify under the HBP.

Do I have to pay the government back?

You will have 15 years to repay the amount used from your RRSP(s), or you can pay in full at anytime during that period. Your repayment period starts on the second year after you first withdrew your RRSP(s) for the HBP. For example, if you withdrew $35,000 in 2020 to purchase your first home, you have until 2022 before your repayment schedule commences.

Each year, the Canada Revenue Agency (CRA) will send you an HBP statement with your notice of assessment in order for you to understand how much has been paid back to date, the amount you need to contribute to your RRSP(s) and your HBP balance.

Commonly Asked Insurance Questions

There are a few common mortgage-related insurance questions that I often get. Find below the answer to the most popular inquires in an effort to help you understand mortgages better. Contact me for further clarification.

Mortgage Loan Insurance is required if your down payment is less than 20%. If you put less than a 20% down payment, you will need mortgage loan insurance. This insurance protects your lender in the event you default on your mortgage payments. The current mortgage loan insurance companies are CMHC, Sagen and Canada Guarantee.

All lenders require you have a home insurance policy. This home insurance protects you in case of fire, severe weather conditions, accidents, or anything that can cause damage to your home. Home insurance policies offer full replacement or payouts in the case of damage.

This insurance plan provides mortgage insurance that will pay off your mortgage in the event of death and offers total disability protection as well. As a Mortgage Broker, it is my responsibility to ensure that you are offered Mortgage Life/Disability Insurance on your mortgage. Your lender will also offer you a similar Mortgage Life/Disability policy. Please be advised there are differences in terms of these policies.

Your lender could require this. Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership.

Title insurance is not a requirement in Ontario, however your lender could make this a condition of financing. If the lender doesn’t, then the decision on whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company, or insurance agent/broker. To fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is essential to keep in mind that title insurance does not replace legal advice when purchasing a property.

For a onetime fee, called a premium, a title insurance policy may provide protection from unknown title defects (title issues that prevent you from having clear ownership of the property);

  • Existing liens against the property’s title (e.g., the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property);
  • Encroachment issues (e.g., a structure on your property needs to be removed because it is on your neighbor’s property);
  • Title fraud
  • Errors in surveys and public records
  • Other title related issues that can affect your ability to sell, mortgage, or lease your property in the future.


Your title insurance policy will protect you as long as you own your property and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.

Should I Take A Fixed Rate Or A Variable Rate Mortgage?

You’re probably thinking fixed, because that’s what most people think they should do, and it’s all their peers ask them: “What’s your interest rate?” There’s more to your mortgage than the upfront rate, which is all you see and think about, and all you believe you should be shopping for. Let’s start by defining both:

Fixed rate mortgage

An interest rate that does not change during the entire mortgage term.

Variable rate mortgage

An interest rate that will fluctuate in accordance with the prevailing market prime rate during the mortgage term.

And let’s define term to make sure we’re on the same page:

The length of time during which you pay a specific rate on the mortgage loan (i.e., the number of years in your mortgage contract). This is different than the amortization period. A mortgage is usually amortized (completely paid off) over 25 years, but can be up to 30 in some cases.  Mortgage terms typically range from 6 months to 5 years. After the term expires, the interest rate is usually renegotiated with the lender (your bank, for example) or a new lender.

So why do most people therefore opt for the fixed rate mortgage? The usual answer is fear; fear of rates increasing and their mortgage payment increasing. Something most Canadians never believe is rates will hold steady, or even decrease, and then they will save money.

Common concerns are “my interest rate will double overnight” or “my mortgage payment may double overnight”:

  • Interest rates cannot spike randomly: There are 8 prescheduled dates throughout the year when the Bank of Canada can adjust the “Prime” lending rate
  • The interest rate will not double overnight: In fact, the rate is unlikely to adjust by more than 0.25%.
  • The payment will not double overnight, and certain lenders offer a “fixed payment” option where the payment will never adjust, and only the amount of the payment going to principal and interest will adjust.


The most important thing to think about with your mortgage however is not the rate, it’s the potential total overall cost to yourself as the borrower. Often the prepayment penalty to break a 5 year fixed rate mortgage is 900% larger than the penalty to break a variable rate mortgage: Would this affect your decision making process?

The penalty to break a fixed rate mortgage is more often than not the “Interest Rate Differential”. Put simply, it’s a complex penalty that cannot be calculated ahead of time because it relies on knowing when you will break your mortgage and the rates that lender is offering at that time, which are both unknowns.

The penalty to break a variable rate mortgage is 3 months of interest on the outstanding balance of the loan.

You’re probably going to tell me you have no intention to break the terms of your mortgage, and incur a prepayment penalty, but 65% of Canadians break their mortgage on average at the 33 month mark. So what constitutes breaking the terms of your mortgage? You wanting to make a significant change to the agreed upon terms. What might be some of the reasons you need to break the terms of your mortgage?

  • The desire for a lower rate, because market rates have decreased
  • Selling your home and exiting the homeownership market completely
  • Marriage – 2 people, with 2 mortgages coming together into one home now only need 1 mortgage
  • Having children: We need a bigger home!
  • Divorce – Even if one partner wants to take the mortgage on, they may not qualify on their own
  • Health issues
  • Social issues
  • The desire to leverage capital from the property for a variety of reasons:
    • Home renovations
    • To payout higher interest consumer debt
    • To raise capital to help a family member purchase a home
    • To start a business
    • To fund an existing business
    • To cover the failure of an existing business without being forced to sell the home


Most mortgages will be “full featured” meaning they come with “portability” so you can take it with you to another qualifying property:

Porting/Portability/Portable Mortgage

Transferring an existing mortgage from one home to a new home when you move. This is known as a “portable” mortgage.

However, just because your mortgage is portable, that doesn’t mean the next property you want to buy will qualify to have that mortgage ported to it, and none of us know when we’ll stumble upon our dream home. If it cannot be ported, you’ll still end up paying a penalty to break the mortgage, and if you took the fixed rate, you’ll likely be paying the larger penalty.

Your life is variable, your future is variable, so should your mortgage also be variable?