Bruce  Tilden

Bruce Tilden

Sales Representative

RE/MAX Realtron Realty Inc, Brokerage *

(905) 470-9800
Email Me

Funding Requirements

Funding Requirements

Purchasing a home requires up-front funding, often amounting to 8% to 9% of the purchase price, for a variety of applications. It is essential that adequate funding is set aside to address all of the following:

Down Payment / Deposit(s)

This is usually in the neighbourhood of 5% of the purchase price. The deposit is made when tendering an offer or within 24 hours of acceptance and may or may not equal the full amount of the down payment. If it does not equal the down payment, a subsequent deposit or deposits will be required on specified dates prior to closing.

Closing Costs:

  • Harmonized Services Tax (HST): Most residential resale homes are exempt and most new homes and those substantially renovated and sold for more than $400,000 by a builder/ renovator are not. HST applies to most transaction services including lawyer’s fees, appraisals, processing fees, home inspections, water quality and replenishment analysis, mortgage and home insurance, real estate sales commissions, and moving expenses. Land registration fees are not taxable.

  • Home Inspection: This may be one of the conditions in your offer and can cost between $350.00 and $600.00 depending on the complexity of the undertaking. Generally due at commencement of the inspection.

  • Home Insurance: Your mortgage lender will require that you have adequate home insurance in place to cover the replacement cost of your home and its contents on the closing date.

  • Provincial Land Transfer Tax (LTT): Paid on your behalf by your lawyer as part of the closing process in accordance with the following fee schedule:

Home Purchase Price

Land Transfer Tax Factor

Land Transfer Tax Amount

Simplified Calculation

$0 to $55,000



Purchase Price × 0.005

$55,001 to $250,000



(Purchase Price × 0.010) - $275

$250,001 to $400,000



(Purchase Price × 0.015) - $1,525

$400,001 +



(Purchase Price × 0.020) - $3,525

* Surcharge in the amount of 0.005 applicable to single-family and duplex residences only.

  • Toronto Municipal Transfer Tax (MLTT): Paid on your behalf by your lawyer as part of the closing process in addition to the provincial Land Transfer Tax and in accordance with the following fee schedule:
For property containing at least one, and not more than two, single family residences with a consideration value of:
Home Purchase Price
$0 to $55,000
$55,000 to $400,000
$400,001 +

For all other property with a consideration value:

Home Purchase Price


$0 to $55,000


$55,000 to $400,000


$400,000 to $40,000,000


$40,000,000 +


  • Legal Fees and Disbursements: Due upon closing and can cost between $600.00 and $1,100.00 plus the cost of disbursements such as registration fees and applicable GST. Attractive rate packages including title insurance are usually available.
  • Mortgage Application: There is usually a processing fee of about $50.00.  

  • Mortgage Appraisal: Your mortgage lender may require that the property be appraised at your expense to verify its market value. The cost is usually between $200.00 and $300.00 and is due when the appraisal is contracted. Lenders often agree to absorb this expense if you ask.

    Mortgage Interest Adjustment: Due, where applicable, at time of closing.

  • Mortgage (High Ratio) Loan Insurance: This may be in the form of a lump sum or may be added to your monthly mortgage payments. Both Canadian Mortgage and Housing (CMHC), Genworth Insurance Canada (Genworth) and a number of new entrants to the Canadian marketplace provide this coverage to high-ratio lenders in accordance with the schedule presented below.
  • To obtain CMHC or Genworth Mortgage or Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.

  • The CMHC or Genworth Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
  • Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC or Genworth Mortgage Loan Insurance is more than fully offset by the savings achieved.

  • A 10% premium refund, and a premium refund for a longer amortization period (if applicable) may be available when CMHC Mortgage Loan Insurance is used to finance an Energy-Efficient Home.

Loan-to-Value Premium on Total Loan Premium on Increase to Loan Amount for Portability and Refinance
Standard Premium Self-Employed without 3rd Party Income Validation Standard Premium Self-Employed without 3rd Party Income Validation**
Up to and including 65% 0.50% 0.80% 0.50% 1.50%
Up to and including 75% 0.65% 1.00% 2.25% 2.60%
Up to and including 80% 1.00% 1.64% 2.75% 3.85%
Up to and including 85% 1.75% 2.90% 3.50%* 5.50%*
Up to and including 90% 2.00% 4.75% 4.25%* 7.00%*
Up to and including 95% 2.75% N/A 4.25%* *
90.01% to 95% —
Non-Traditional Down Payment***
2.90% N/A * N/A
Extended Amortization Surcharges
Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period (for LTV ≤ 80%).

For portability and refinance, the premium is the lesser of Premium on Increase to Loan Amount or the Premium on Total Loan Amount. In the case of portability, a premium credit may be available under certain conditions.

* Premiums shown with an “*” do not apply for refinance. For portability the maximum LTV ratio is 90%, but CMHC may consider higher LTV ratios when the new ratio is equal to or less than the original LTV. For portability, the premium is higher for non-traditional down payments on Increase to Loan Amount.

** For conversion from Self-Employed with traditional 3rd party income validation to Self Employed without traditional 3rd party income validation, the premium is the lesser of: a) the Premium on Total Loan Amount or; b) the outstanding balance multiplied by a 1.5% premium plus the Premium on Increase to Loan Amount.

*** Down Payment Requirements — Traditional sources of down payment include: Applicant’s savings, RRSP withdrawal, funds borrowed against proven assets, sweat equity (<50% of min. required equity), land unencumbered, proceeds from sale of another property, non-repayable gift from immediate relative, equity grant (non-repayable grant from federal, provincial or municipal agency). Non-traditional sources of down payment include: Any source that is arm’s length to and not tied to the purchase or sale of the property, such as borrowed funds, gifts, 100% sweat equity, lender cash back incentives.

Premiums in Manitoba (effective July 15, 2012), Ontario and Quebec are subject to provincial sales tax. The provincial sales tax cannot be added to the loan amount.

  • Statement of Adjustment Items: Both buyer and seller are each responsible for their share of realty taxes, fuel and utilities with the buyer assuming responsibility for the date of closing and beyond. Where the seller has prepaid some or all of these, the buyer will be required to reimburse the seller at time of closing for that portion attributable to the closing date and beyond. 

    • Survey: The mortgage lender may request an up-to-date survey prior to finalizing the mortgage loan. If the seller doesn’t have one or doesn’t agree to acquire one, you will have to pay for it yourself. The cost can run from $1,000.00 to $2,000.00. Due at time of closing. Today, most mortgage lenders accept title insurance in lieu of a current survey. However, most lawyers recommend having a survey to confirm the true nature of the property and all improvements being purchased and to identify potential issues such as easements, encroachments, abandoned fuel tanks, etc.

    • Title Insurance: Your lawyer will likely recommend title insurance to cover loss caused by defects in the title to the property. This usually costs about $300.00, which can be $700.00 to $1,700.00 less expensive than contracting for a new property survey.
    • Water Quality/Replenishment Inspection: If the home you choose has a well, you will want it to be bacteriologically tested and gauge the water replenishment rate at a cost of $50.00 to $100.00.

Start-Up Costs:

  • Capital acquisitions: Furniture, appliances, equipment of all kinds, fixtures and tools.
  • Condominium Fees: Initial in-advance payment.
  • Cushion: Retain to cover unexpected expenses.
  • Landscaping: Lawn and garden enhancements and driveway, walkway and fencing repairs.
  • Moving Expenses: Usually due on the day of your move.
  • Renovations: Minor repairs and re-decorating including curtains and carpeting.
  • Service Activation: Telephone, Internet, cable, satellite and possible utility hook-ups and deposits.

Have Questions?