How Much Does It Cost to Buy a House

April 7, 2025 | Buyers

How Much Does It Cost to Buy a House

Ever wonder what the cost of buying a house is? Even if you’re new to the market, you likely realize there’s more to it than just the purchase price. Everyone has heard the term “closing costs.” However, there can be some confusion about what this means and how much you will need to buy your next house.

Every situation is different, so we can’t give you a specific, “If your house costs $X, your closing costs will be $Y.” What we can provide is a detailed list of common expenses to budget for and ensure you stay within a comfortable range when buying your home.

Do you want premium access to our newest listings? Gain a competitive advantage over other buyers by signing up for early alerts right here.

Cost of Buying a House

The purchase price is the most obvious and significant cost of buying a house. Real estate values have increased over the years. If you’ve already been in the market, this fact represents both good and bad news.

The good news is that your existing house is almost certainly worth more than you paid for it, which works to your advantage when you go to sell. The bad news is buying your next house will also be more expensive. That said, your equity protects you from the impact of rising prices.

Higher values can be an obstacle for a first-time buyer, although they are not always insurmountable. In addition, there are provincial and federal assistance programs to help make your first venture into the market more accessible. A local real estate agent can guide you through them all while keeping an eye out for a home that suits your budget.


Why buy your next home in Guelph? We can think of a few reasons:


Down Payment and Deposit

Down payment and deposit are two terms that often confuse buyers, especially those new to the market. Contrary to popular belief, they are not one and the same.

The down payment is the portion of the purchase price that you pay with your own funds, while your lender covers the rest. The latest guidelines for the minimum down payment are as follows:

  • If the house is priced at $500,000 or less, a 5% down payment is required, up to $25,000.
  • A house from $500,000 to $1.5 million requires 5% on the first $500,000 and 10% on the remainder. For example, an $800,000 house requires $55,000 ($25,000 + $30,000).
  • Any amount above and beyond requires a down payment of at least 20%.

The deposit is the portion of the down payment that you submit to the seller’s brokerage within 24 hours of acceptance. In Guelph, an average deposit for a house can range from 3 – 5% of the total purchase price.

If you buy a house valued at $500,000, this makes your total down payment $25,000, with a minimum deposit $15,000. The remaining $10,000 is due upon your closing date.

Home Inspection

The seller will typically cover this cost if they accept an offer with the condition of a home inspection. If the market is competitive, you may not be in a position to request conditions.

However, you still likely want an inspection to ensure you avoid any unexpected and expensive problems. The cost varies, but you can expect to pay at least a couple of hundred dollars for an experienced inspector.

Mortgage Insurance

Whenever your down payment is less than 20%, the lender will require mortgage insurance to protect their investment. Fortunately, this is an expense you may not notice as much since it is part of your monthly payment.

If you put 20% or more down, then you do not need to pay mortgage insurance. This is a great way to reduce the overall cost of a house whenever feasible, but it requires more of an initial investment. For example, instead of paying $25,000 upfront for a $500,000 property, you’d need to come up with $100,000.

Appraisal Fee

Most lenders will require an appraisal of the house that you are purchasing to verify its value. The appraisal cost is typically a few hundred dollars. Many lenders will cover the appraisal fee. However, it does sometimes fall to the buyer, so it’s important to take it into account when determining your budget.

Land Transfer Tax

Land transfer taxes are the most substantial of all of your closing costs as a buyer. They can run into the thousands of dollars, and you must pay them upon closing rather than rolling them into your mortgage. Like the down payment, the taxes owing depend on the purchase price of the home.

The first $55,000 is subject to 0.5%.

  • You pay 1% on the amounts from $55,000 to $250,000.
  • From $250,000 to $400,000, a tax of 1.5% applies.
  • All amounts exceeding $400,000 are subject to 2.0%.
  • The percentage increases to 2.5% for all amounts exceeding $2,000,000, where the land contains one or two single family residences.

There is some good news for first-time buyers, who can take advantage of a one-time rebate on the land transfer taxes. This can save you up to $4,000 on your closing costs.


Are you ready to buy your next home? The posts below will help you know what to look for and what to avoid:


Other Moving Expenses

Some might argue that hiring a mover, renting storage space, setting up utilities, and professional cleaning services are not official “closing” costs. Regardless of what you call them, all of these little expenses add up, and you should leave room for them in your budget.

There is also the cost of your time as you perform necessary tasks like changing your address on your driver’s license and health card, updating your bank and investment accounts, and other correspondence.

If you have children, you’ll need to look up the catchment areas for the appropriate schools. You may also want to check out the local recreational centres and other amenities.

The checklist can seem daunting, but a local real estate service can keep you on track. We have been through the process countless times, and are happy to let you know what to expect at every turn.

Do you want extra guidance and support during your move? Our top Guelph real estate agents are here to answer all of your questions. Reach out today at info@gowylde.ca or call 519-826-7109 for more information.

GoWylde Newsletter