Mortgage Costs

There are a variety of costs that arise when purchasing a house and obtaining a mortgage. They are summarized here.

Legal Fees: a lawyer or notary is required to both register the purchase of the property as well as the mortgage. Prices vary widely based on the lawyer or notary.

Appraisal Fees: an appraisal is often required by the lender to confirm the value of the property. The appraiser is an independent expert who determines the value of the property by comparing it similar recent sale prices. A typical appraisal is about $300 but can be higher for more expensive or rural properties.

Property Transfer Tax: The Province of BC assesses a tax on most residential property transactions. The tax is calculated as follows:

  • 1% on the first $200,000
  • 2% on the next $1,800,000
  • 3% on any amount over $2,000,000

The tax is payable at closing (the appointment with the lawyer when the mortgage documents are signed) and cannot be added to the mortgage.

First time buyers are exempt from this tax if 1) the price is less than $475,000, 2) the clients are BC residents, 3) the clients are either citizens or permanent residents and 4) the property will be their principal residence.

Title Insurance: some lenders require title insurance, which provides protection in the event of title fraud or errors on the title. The cost is typically in the $100-$150 range. This is arranged by the lawyer.

GST (New Units Only): New units are assessed 5% GST. The GST is added to the price of the new unit.

Property Inspection (Optional): Clients often hire a property inspector to walk through the property and assess critical areas like the foundation, roof, windows and doors, electrical boxes, etc. This is not a requirement to get a mortgage but is a good idea, especially for older homes.