What To Save For When Buying a Home

by Michael Lau

Essential Savings Checklist for First-Time Homebuyers

Buying a home is a significant financial milestone. While exciting, it requires careful planning and diligent saving. Markham, ON, remains one of Canada’s most sought-after cities, blending suburban charm with urban convenience. If you’re planning to buy a home here in 2025, preparing financially for both expected and hidden costs is crucial.

Here's a breakdown of key areas to focus your savings efforts:

1. Down Payment:

The down payment is the largest upfront expense:

•5% of the price for homes under $500,000.

•10% for the portion of the price between $500,000 and $1,499,999.

•20% for homes over $1,500,000.

With the average home price in Markham surpassing $1 million in 2025, saving at least 10% can help you avoid the cost of mortgage default insurance and reduce your monthly payments.

2. Closing Costs:

Closing costs typically range from 3%–5% of the purchase price. These include:

•Land Transfer Tax: Based on your home’s purchase price. For example, a $1,200,000 home would have approximately $16,475 in Ontario Land Transfer Tax.

•Legal Fees: $1,500–$3,000 for lawyer services like title searches, registration, and paperwork.

•Title Insurance: Protects against title issues or fraud; expect to pay $300–$500.

•Adjustments: Reimbursements for prepaid utilities or property taxes made by the seller.

3. Emergency Fund:

Unexpected costs, from plumbing leaks to roof repairs, can occur. Having 3–6 months of living expenses saved ensures you’re financially secure during emergencies.

4. Home Inspection and Appraisal:

• Home Inspection: Costs around $400–$600 and ensures the home is free from structural issues.

•Appraisal Fee: Often required by lenders to validate the home’s value, costing $300–$500.

5. Moving Expenses:

Moving costs vary depending on the size of your move:

•Professional movers: $1,500–$3,000.

•Packing materials: $100–$300.

•Utility connection fees: Budget $150–$300 for setting up water, electricity, and internet services.

Don't Overlook Logistics: Moving costs can vary significantly.
Estimate Costs: Consider hiring movers, renting a truck, packing supplies, and potential storage fees.

6. Property Taxes:

In 2025, property taxes in Markham are expected to remain around 0.645017% of the home’s assessed value. For a $1,200,000 home, this would be approximately $7,740 annually.

7. Mortgage Default Insurance:

If your down payment is less than 20%, you’ll need to factor in mortgage default insurance premiums:

•Ranges from 2.8% to 4% of the mortgage amount.

7. Home Insurance:

Lenders require home insurance before finalizing your mortgage. In 2025, premiums for a home in Markham average $1,200–$1,800 annually, depending on the home’s size and coverage level.

8.Ongoing Maintenance:

To keep your home in good shape, budget 1%–2% of the home’s value annually for maintenance. For a $1,200,000 home, that’s approximately $12,000–$24,000 per year for repairs, upgrades, or emergency fixes.

9. Furniture and Appliances:

If you’re purchasing a larger home or moving into a new property, you may need new furniture and appliances:

•Essential appliances (refrigerator, stove, washer/dryer): $5,000–$10,000.

•Furniture for key rooms: $10,000–$20,000 depending on your style and needs.

Tips for Effective Saving:

Create a Budget: Track your income and expenses to identify areas for cost-cutting.
Automate Savings: Set up automatic transfers to your savings account.
Reduce Debt: Prioritize paying down high-interest debt.
Explore High-Yield Savings Accounts: Maximize your savings growth.