How Much Are Closing Costs When Buying a House?

One of the top pieces of advice for anyone planning to buy a house is to make a watertight budget. However, it’s worth noting that your budget needs to account for many things beyond the down payment.

Closing costs are easy to overlook, but to do so would be a costly mistake that could cause you to fall into debt or lose out on your dream home. With that in mind, let’s examine just how much you can expect to pay in closing costs.

The amount you pay on closing costs depends on several variables. However, on average, buyers in the U.S. can expect to pay anything between 2% and 5% of the total sale price. Meanwhile, the figure is generally slightly lower in Canada, usually between 1.5% and 4% for a typical house purchase.

How Much Are Refinancing Closing Costs?

If you’re planning to refinance your home, you’ll also need to pay closing costs, typically between 2% and 6% of the total loan amount. These closing costs comprise several services, some with a flat fee and others charged as a percentage.

How Much Are Closing Costs for the Seller?

If you’re also selling your home while buying a new one, you must budget for the closing fees on both transactions. It’s usually the seller’s responsibility to pay any real estate agent commissions, which can add a hefty chunk to the closing costs, typically around 5% to 6% of the sale price. In addition, you can expect to pay an extra 1% to 3% in other closing fees, taking the total to around 6% – 8%.

Breaking Down the Typical Closing Costs for Buyers

Now that you know how much you should budget for closing costs, let’s look at each component in detail.

Legal Fees

You’ll typically need to work with a closing attorney when buying a home. It’s their job to oversee the entire process, and while they don’t represent either the buyer or the seller, their fee is generally split between the two. Depending on your location, the cost ranges from $500 to $1,500.

Appraisal Fee

Your lender will need to have the house valued before they agree to lend you the money you need to purchase it. On average, it costs $300 to have a house appraised, though it may be more for larger properties. In addition, if the seller completes repairs on the home after the appraisal, your lender may require a reinspection, which costs another $300.

Mortgage Fees

There are several fees associated with your mortgage. These include credit report fees, around $30, and application fees which generally cost between $300 and $500. But, most important is the mortgage orientation fee that all lenders charge to cover their services and admin costs. On average, this will cost around 1% of the loan value, though some lenders offer lower prices, and it’s a good idea to shop around.

Title Insurance Policy

Typically required by the lender, this insurance protects both the lender and the owner against future title claims. It can cost anywhere between $500 and $3,500 depending on the location and size of the property.

Home Inspection (optional)

While not mandatory, it’s well worth having your future home inspected by a professional before signing on the dotted line. Depending on the size of the house, it typically costs between $250 and $700. Of course, for additional inspections, such as lead paint, pest and roof, you’ll need to budget more.

Escrow Fees

An escrow account is a third-party holding account in which you’ll deposit various fees, such as the down payment. Once the sale is complete, the funds will be distributed to the appropriate individuals. Escrow fees typically cost around 1% of the sale price. This is often split between the buyer and seller, though it must be agreed upon first.

Private Mortgage Insurance (PMI)/Mortgage Default Insurance

If your down payment is less than 20%, most lenders will require you to take out mortgage insurance. PMI costs between 0.5% and 2.5% of the mortgage and is usually rolled into your mortgage payments. However, you’ll often need to pay the first month before closing.

Recording and Documentation Fees

Several companies will be involved in processing your real estate transaction, each with a fee to be paid. Courier fees are required if you’ve had to send your documents physically and typically cost around $20. Bank processing fees are also required, generally between $25 and $100, and you’ll need a notary to make the signing of all documents official, so another $100. Finally, the lender will charge a recording fee of around $50 to pay the county to make a public record of the transaction.

Prepaid Property Taxes and Utilities

Any taxes and utilities that have been paid ahead by the seller need to be reimbursed by the buyer. The attorney will calculate the cost, which generally runs between $1000 and $2000.

House Insurance

Most lenders require you to take out homeowners insurance, typically paid annually or biannually. The cost varies by house type and location, so be sure to get a few quotes.

New Listings in British Columbia Increase by 5.5%

Housing markets across British Columbia saw an additional 16,400 new listings added in June 2022, representing a 5.5% increase, compared to same time last year. 

Canadian Home Sales Down Again in June

“Sales activity continues to slow in the face of rising interest rates and uncertainty,” said Jill Oudil, Chair of CREA. 




Do I need a REALTOR® to purchase a home?


Realtor in a blue suit shows a young couple a property, couple entering through front door

While there are plenty of great resources available to help you narrow down what you’re looking for, and research the region or neighbourhood that may best suit your lifestyle, consider these benefits to hiring a real estate professional when buying your next home.

A REALTOR®1 will not only take the time to help you find the right property, but also assist you through the buying and closing process. By getting to know you they can make suggestions of similar properties in similar neighbourhoods that may be off your radar. They have their fingers on the pulse of communities across the region they cover. They will advise you through the offer process and once a bid is won, they can recommend trusted professionals to help you complete the transition. 

Here are some benefits to consider:

ACCESS TO A LARGE NETWORK: A licensed real estate agent will have access to more available properties than the general public. Through their professional databases and relationships with other agents, a realtor knows what properties are coming on the market before they are posted, and may have other clients, or colleagues with clients, who are preparing to sell a home that fits your criteria. Some homes are sold prior to being listed and others are only publicly listed for a very short time. You could miss out on your perfect home.

NEGOTIATING: A realtor is a professional negotiator, and it is part of their job to get you the best possible deal on a property. They have insights into the local market, and with access to important data, they have a deep understanding of property values in a particular area at a given point in time.

NAVIGATING THE TRANSACTION: A real estate agent is an expert in their field, and having an experienced professional on your side will take the stress out of the critical paperwork that is necessary when purchasing a home. A realtor will guide you through one of the most significant and important transactions of your life.

ACCESS TO OTHER PROFESSIONALS: It’s always helpful to have referrals from friends and family when hiring a professional. Just as you may be referred to an agent, your agent can refer others to you. Real estate professionals have access to a large network of home inspectors, appraisers, contractors, financial advisors and mortgage brokers, and movers, to name a few. When you hire experienced experts, you get what you want the first time while saving time and money.

Want to find a Royal LePage real estate agent in your area?

1The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.

What Is a Bridge Loan and How Does It Work?

Are you a homeowner looking to relocate or simply buy a new home? In that case, taking out a bridge loan can help you fill the gap between selling your house and financing your new purchase. Here’s what you need to know.

What Is a Bridge Loan?

A bridge loan, also known as a swing loan, is a short-term loan taken out by an individual or a company until they can secure permanent financing. In real estate it’s a type of loan that uses the existing equity in your home to finance the purchase of a new house. Quick to take out and quick to pay back, most lenders will expect repayment when the house is sold or within one year. Bridge loans also come with higher interest rates and more rigorous requirements than conventional mortgage loans.

How Does a Bridge Loan Work?

Bridge loans are often used in real estate purchases to help a buyer bridge the financial gap between finding a property and securing a mortgage. For example, if you’re a homeowner, one common scenario is finding a new property that you’re interested in buying but either lack the funds for a downpayment or, in a hot market, you want to secure the sale before your current property sells. In such cases, a bridge loan will help cover the downpayment and closing costs.

Once your first property is sold, you can then use the resulting funds to pay off the bridge loan. Most lenders will expect you to pay back the loan within a year, but some may extend that deadline to up to two years.

Applying for a bridge loan takes significantly less time than a regular mortgage, and most lenders will approve your loan within 72 hours. There are, however, some requirements to be aware of. For example, the maximum amount you can take out on a bridge loan is usually 80% of the combined value of your current home and the one you want to buy. If you lack sufficient equity in your home, the lender may reject your application. Similarly, you will need an excellent credit score and a low debt-to-income ratio. It’s also worth keeping in mind that lenders typically expect collateral in the form of a property.

When Is a Bridge Loan a Good Idea?

Taking out a bridge loan can work in your favor if you’re buying a home in a seller’s market. In such cases, buyers often face a bidding war for their dream home. And because it’s a hot market, it’s unlikely that the seller will agree to a sale contingency. With a bridge loan typically taking around three days for approval, you can use it to tip the scales in your favor.

A bridge loan can also help if you need to relocate fast and you’ve already found a house that ticks all the right boxes, but you haven’t yet had the time to sell your old one. Again, being able to take out a quick loan that would cover the down payment and closing costs will be of immense help.

Last but not least, a bridge loan can be beneficial if you already have at least 20% equity in your home but you can’t afford to make a down payment on a new property. Not only will the bridge loan provide funding for that, but if you can use it to cover more than 20% of the down payment, you will also avoid paying private mortgage insurance (PMI) on your new mortgage loan.

Bridge Loan Alternatives

Bridge loans can be real lifesavers, but the high interest rates and quick repayments can make some homeowners wary. Here are some alternatives worth considering.


A home equity line of credit is one of the most common alternatives to a bridge loan. Both can be used to tap into your home equity, and both use your home as collateral. However, a HELOC has lower interest rates, and you won’t be required to make any principal repayments during the draw period, which can take a minimum of 10 years.

80-10-10 Loan

A combination of fixed-rate loan and HELOC, the first loan covers 80% of the new home cost, with another 10% loan piggybacking as a second mortgage covering half the minimum down payment needed to avoid PMI. It’s a good alternative if, despite having enough equity, you can only provide 10% of the down payment.

Like any type of financing, a bridge loan can be a great way to fund the purchase of your dream home. However, under the wrong circumstances, they can quickly become a strain on your budget. To make the most of it, take the time to discuss your options with your lender or financial advisor.

How Can You Tell if it’s Time to Sell?

These tips will help you gauge the best time to re-enter the market

With spring around the corner, we are entering what is traditionally the best time of year for home sellers. As winter passes and the vibrancy of spring makes a reappearance, buyers tend to re- emerge as well. So how do you know if this the right time to sell? Here are few thoughts to help as you ponder:

Necessary Change Is your family outgrowing your current property? Or is it time to downsize after
your kids have grown and left the nest? The big question to ask is whether your home is still serving your needs. Maybe you are thinking of starting a home office and need more space, or you want something with less stairs as you plan to age in place. Improving your quality of life is a key reason to sell and relocate.

Market Status
The current state of the market in the Okanagan could make it an ideal time to sell. We have seen a robust market over the past couple years, with prices rising while interest rates remain
competitive. Some homes are still selling at near or even over the listing price. There will eventually be a correction, whether it is from rising interest rates or other government intervention. It may not be the only factor but taking advantage of current market conditions could be a strong motivation to sell.

Equity Utility
Make your equity work for you. If you have built up enough equity to pay off your current mortgage and make a 20% down payment on your next home, then selling could be feasible. Given the
market, you will want to make sure that you are situated to acquire your next home or chart a plan towards that eventuality. We can help you evaluate your current situation and move towards your goals.



Clever ways to boost your home’s curb appeal


clever_ways_to_boost_curb_appealWhen selling your home, nothing looks quite as good as a well-manicured front garden or beautifully decorated balcony. While many homeowners focus on the interiors of their homes, a property’s exterior can make all the difference, adding to its appeal and boosting its resale value.

And, a home’s exterior plays an important role in shaping a prospective purchasers’ decisions. As a first impression, these areas help set the tone and encourage buyers to visualize themselves owning the home.

An attractive exterior doesn’t have to break the bank. There are a number of ways you can create a stunning outside environment without much effort or money. Here are just a few tips to carry you through the selling season:

Clear the clutter. One of the easiest ways to make any outdoor space come to life is to keep it clean and tidy. This lets buyers visualize how they will make the space their own when it trades hands. 

Easy container gardens. Planted containers can add a charming look and feel to entranceways and balconies. When picking pots, look for similar styles that vary in size for a nuanced appeal.

Drought-tolerant plants. Flowerbeds and plants are often a great way to add a splash of colour to any exterior. For maximum effect, choose an assortment of perennials and annuals that require less water and are able to withstand hot summer days.

Don’t forget to fertilize. Though sunlight and water are usually enough, periodically feeding your plants essential nutrients will promote lavish growth and ensure consistent flowering.

5 thrifty DIY fix-ups to help sell your home


When preparing your home for the market, it’s great to know there are some relatively inexpensive improvements that can make a big impact with buyers.

5_thrifty_fix-ups_to_sell_your_homeA few well-placed pieces of décor and a clutter-free home are simple things you can do on a budget to bump up interest in your home. Once the fundamentals of a well-maintained home are taken care of, these easy initiatives can seal the deal.

  1. Clear the decks. Counter space is extremely important for buyers. Be sure to store kitchen and bathroom items off the counters. Purchase storage baskets in several different sizes to help you clear the decks in a hurry and minimize clutter.
  2. Brighten up storage spaces. Closets and cupboard space are important selling features. You can make the most of what you have by purging unused items and painting a light colour inside cupboards and closets. Adding battery-operated lighting is also an inexpensive way to brighten a dark closet.
  3. Replace interior room doors. Quickly and inexpensively brighten hallways and rooms by replacing interior doors and hardware. New white panelled doors and hardware can quickly freshen the home. Look for sales at your local building centre.
  4. Tear up dingy broadloom. You may be pleasantly surprised by what’s underneath. Even if you don’t like what you see, replacing broadloom is one of the most economical improvements you can make when you consider overall return on your dollar.
  5. Paint. Even high-end interior paints are a bargain when you look at what can be achieved with a fresh new finish. Opt for neutral colours in matte or eggshell finishes to camouflage flaws in walls. Trim is best handled with a white shade of satin, semi-gloss or high-gloss finish.

Prices in Canada’s secondary cities continue to rise as buyers prioritize space and affordability in age of remote work


Parents playing with young child in their living room, with moving boxes and large window to yard in the background

Since the late spring of 2020, Canadian home prices have been rising at historic rates, following the onset of the global pandemic. Widespread lockdowns suddenly forced millions of workers and students to conduct their daily business from home. While the trend of working remotely was gaining in popularity in the years prior, the seemingly unending health crisis accelerated the movement, driving many Canadians living in major urban centres to trade in their cramped quarters for more space in smaller cities and rural communities.

The latest Royal LePage House Price Survey and Market Forecast shows price growth in Kingston’s single-family detached segment was the highest in the country, posting an increase of 46.5% year-over-year in the third quarter. Following Kingston, Ajax had the next highest year-over-year home price appreciation for the detached properties, rising 36.2% year-over-year; then, Langley (34.5%) and Greater Victoria (34.0%). Kingston also had one of the highest aggregate price increases nationwide (36%), second only to Saint John, New Brunswick (36.4%).    

“Competition in Kingston’s housing market is incredibly high. Inventory has reached an all-time low, while demand gets stronger everyday,” said Bob Armer, area manager, Royal LePage ProAlliance Realty. “Today, there are even more buyers from out of town – namely from Toronto and the GTA – than there were a year ago. This migration continues to put a lot of upward pressure on prices, which is especially challenging for local buyers.”

Armer noted that Kingston’s proximity to Toronto has made it very popular among young people who can work remotely but may need to be in the office once or twice per week. 

This is just one example of secondary cities that have grown in popularity and population over the last 15 months. Nationally, home price appreciation is being driven by the detached segment in secondary cities, like Kingston. Royal LePage is forecasting that the aggregate price of a home in Canada will increase 16% per cent to $771,500 in the fourth quarter of 2021, compared to the same quarter last year, putting real estate values on track to grow 33% by the end of the year from June, 2020.

Read Royal LePage’s third quarter release for more regional and national insights. 

Top 10 tips for selling your home in the winter


Snowman with plaid hat and scarf outside a home in winter

The common notion that spring is a better time to sell than winter is being challenged by today’s hot seller’s market conditions. A recent Royal LePage survey found that 79% of real estate professionals say they would advise their clients to sell this winter, rather than wait until spring; significantly higher than the 64% who say they would have given that advice prior to the pandemic citing that current demand is outstripping supply in another year of unusual winter market activity.  

If you are considering listing your home this winter season, be sure to review our top ten tips for preparing your home for a winter sale!

  1. Include both winter and summer photographs of your home in the listing so prospective buyers can better imagine themselves in the property all year round;
  2. Clear a path to the front door and pathways around the home. Make sure the walkway is free of snow and ice; 
  3. Turn up the heat in your home to a comfortable temperature;
  4. Seal up any drafts in windows and doors;
  5. Provide shoe covers or slippers, or lay down a large mat, so visitors don’t leave your floors looking messy for the next appointment. Don’t forget to remove winter boots and coats from your hall to make the area look bigger and so that visitors have a clear space to enter;
  6. Up your winter curb appeal: Upgrade your mailbox and house number; add winter floral arrangements with hearty outdoor perennial planters
  7. As the days are shorter and it gets dark earlier, keep outdoor lights on during showings; 
  8. Whenever possible, show your home during the daytime and let lots of natural light inside;
  9. Make the front door and entrance look warm and welcoming with seasonal decor;
  10. And, showcase how outdoor spaces can be enjoyed even in the colder months. Be sure to clear off outdoor furniture that can be used in winter.

8 Things Careful Home Buyers Always Pay Attention To