MoneyFlex

By Alicia Tyler on February 26, 2025
Estimated reading time: 9 minutes

By Alicia Tyler on February 26, 2025
Estimated reading time: 9 minutes

What is the cost of buying your first home as a Gen Z? Find out the total costs you’re going to pay.

Owning a home—it’s the dream, right? A place that’s yours. No more rent, no more landlords. Free reign to modify your space as you see fit and no risk of eviction for any reason. Buying a home feels like graduation from renting—finally, a place that’s all yours. But just like starting college or university, the loan (a.k.a. your mortgage) is only part of the price tag. Also anticipate hidden fees, surprise expenses and ongoing costs that can add up fast if you’re not prepared.

Know that before you even get the keys, you have to pay closing costs, land transfer taxes, legal fees—and more—you didn’t see coming. And once you move in, say hello to property taxes, maintenance and surprise (!) repairs. In this MoneyFlex column for Gen Z Canadians, I’m breaking down the two major phases of home ownership—before closing and after possession—so you know exactly what to expect and can plan ahead like a veteran home owner.

When most people think about buying a house or condo, they think about the selling price of the property and the down payment needed to secure it.

In Canada, the minimum down payment depends on the home’s price. Here’s what you would need for a down payment:

For example, a $750,000 home requires $25,000 (5% of $500,000) plus $25,000 (10% of the remaining $250,000), totalling $50,000.

If your down payment is less than 20%, then you must obtain mortgage default insurance (CMHC insurance) in Canada, which is added to the mortgage and increases your costs based on the loan-to-value (LTV) ratio. (To figure that out, you divide your mortgage amount by the purchase price of the home. Your mortgage amount is when you subtract your down payment from the purchase price.)

As of 2025, the standard CMHC insurance premiums are:

Here’s how it works. Say you purchase a $750,000 home with a 10% down payment ($75,000), your mortgage would be $675,000. The 3.10% premium would add $20,925 to your mortgage, bringing the total loan to $695,925. The premium is typically rolled into the mortgage and paid off over time. Try MoneySense’s mortgage insurance calculator and input your own mortgage numbers.

Now, if you can hold off until you save enough for a 20% downpayment, Certified Financial Planner Evan Parubets says you’ll be glad you did. “It’s actually way worse than you initially thought because by adding it to the mortgage, you’re paying interest on the CMHC fee for the next 25 or 30 years of the life of the mortgage. And if you calculate how much it is—depending on what interest rates are—it’s probably anywhere from two to three times the original value.”

So, let’s go back to the example of a $750,000 home with a 30-year amortization at a 5%........

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