You’re in the market for a new home but unsure if a freehold or a condo is right for you (and your family). While the purchase price is the primary factor, the amount of your mortgage is also essential.
But that’s not all.
Other significant differences in costs and expenses should be considered before deciding on the type of home to purchase.
In Part One, we’ll review what costs you can expect to pay for a typical two-storey Toronto freehold home with three bedrooms, a yard, and a driveway. In Part Two, we’ll compare these and the other costs of a condo:
- Home Insurance
- Mortgage Protection Insurance
- Property Taxes
- Hydro
- Gas
- Water, Sewage, and Garbage/Recycling Pickup
- Ongoing repairs/maintenance
- Internet/TV and Home Security
Home Insurance
There is a vast cost variance here. The price to insure your freehold home depends on your belongings, area, and insurance claims history. Generally, expect to pay between $100 and $200 per month.
Mortgage Protection Insurance
Purchasing mortgage insurance is a wise idea, though not mandatory, to protect your investment in the unfortunate event of the death of one of the borrowers. This expense varies based on the lender’s rates, how much the mortgage is, and the mortgage term. Generally, 0.6% to 4.5% of the mortgage amount can be expected. This cost can also be integrated into your existing mortgage.
Property Taxes
For a freehold home with a city assessment of approximately $750,000, taxes will be roughly $5300/year. Calculate taxes for properties assessed at different values here.
Hydro
Many factors will contribute to the cost of your hydro, including modernization and efficiency measures, but expect to pay $150-$250 a month. However, there are always ways to lower your hydro bills and other tips.
Gas
Add another $100 – $150 monthly if the home uses natural gas. But you can take advantage of incentives to reduce your bills.
Water, Sewage, and Garbage/Recycling Pickup
These costs are consumption-based. The more people in your home, the more water usage, and the bigger the refuse bins you’ll need. For more specifics, visit the City of Toronto page for Utility Bills. Generally, however, an average house can budget $750+ per year.
Ongoing Repairs/Maintenance
Predicting what could need repair, an update, or maintenance in your home over any given year is impossible. But, some experts say budgeting 1-3% of your home’s value is a safe bet. And if you don’t spend that amount, put it into an emergency fund. Also, increase that percentage if the house is older or an investment property. Consider:
- AC/Furnace:
- Budget monthly fees if your water heater ($15-$60/month) and furnace ($50-$90) are rentals. Unsure if they’re rentals? This will be listed in your purchase agreement.
- Roof: Depending on the material used (asphalt, steel, composite, clay, wood) and roof size, the cost can range from $2500 to $20K+.
- Chimney: Depending on repair or replacement, $350 – $11K+.
- Ducts: Dependent on home size and level of contamination, $200 – $600.
- Bathroom recaulking, new taps and faucets: It is cheaper if you replace them and install them yourself, for a few hundred dollars, but add a few more if you hire a plumber.
- Appliances: New fridges, ovens, washers, and dryers are typically more than a thousand dollars each and up to $5000, depending on how fancy and tech-savvy you would like yours to be.
- Miscellaneous household maintenance: If you want to maintain your property, gardens, and yard but don’t want to do it yourself, you can add to your budget the costs of hiring a landscaping company ($100 on average per month) and snow removal services ($250 to $500 per month). The costs depend on the lot and driveway size.
Internet/TV and Home Security
These costs vary widely based on provider and services, but you can expect to pay between $100 and $500 per month for this trio of products.
In Part Two, we’ll investigate the typical costs and expenses for condo ownership to help you determine what works best for you.
Don’t hesitate to contact me if you would like further advice on how to proceed with your next purchase!
Are you ready to move to the next stage? Let’s chat. Send me an email (hillary@hillarylane.ca) or text/phone (416-882-4707).
Photo by Stephan Bechert on Unsplash
