Thinking of Selling? Costs You Should Know About!

Sabeena Bubber • March 28, 2018

Often times it's the simple math that will betray you when selling a property. In your head you do quick calculations, you take what you think your property will sell for and then subtract what you owe on your mortgage, and the rest is your profit! Well... not so fast, there are several costs that have to be taken into consideration when selling a home. It's especially important to get these costs right when you are selling one property, and using the proceeds from that sale as a downpayment for another property. 

So here is a fairly comprehensive list of costs you may incur when selling your home. 

Real Estate Transaction Costs

Although it may seem odd that you have to pay money to sell your home, that's the reality, and selling a property isn't cheap. If you use the services of a professional REALTOR®, the total commission cost is going to be anywhere between 4-6% of the purchase price, divided between the listing agent (the REALTOR® who represents you) and the buyer's agent (the REALTOR® representing the buyer). It's also good to note that GST is added to real estate commissions. 

If you are looking for a way to get around paying real estate commissions, you might consider selling your house privately. To list your property with a FSBO company (for sale by owner), you are going to be anywhere between $400-$1500 just for setup and a bit of marketing. From there, you may still have to negotiate a commission if potential buyers are working with a buyer's agent. 

Mortgage Discharge Fees

If you have a mortgage on your property, there will be a cost to discharge it, the question is how much?

If you are breaking your mortgage in the middle of your term, you will be responsible to pay a penalty. On a closed mortgage, that penalty will be either 3 months interest or an Interest Rate Differential penalty, known as an IRD. Each mortgage contract is written up differently lender by lender, so it's impossible to simply explain the math here and have you calculate your penalty on your own. In order to figure out your IRD ahead of time, you can either contact your lender directly, or you can contact me and I can help you through the process. 

The IRD penalty is the wildcard in the whole process, because depending on how the lender calculates the penalty, penalties can range from $3,000 to $30,000. It is very important to know what you are dealing with here. 

If you are currently in a variable rate mortgage, your penalty will be equal to 3 months interest. Even if you are in an open mortgage, or have a home equity line of credit secured to your property, there might not be a penalty to discharge, but there will most certainly be some kind of lender fee, usually between $250-$500. 

Lawyer's Fees

In order to discharge the title of your property, and to verify that the buyer is going to receive a clear title of your property, you are going to incur legal fees to sell your property. In a straightforward discharge, expect to pay between $500-$1000, less than when you purchased the property, but an expense none the less. 

Utilities and Property Tax

Although this might not come as a surprise, when you are selling your property, you are responsible for paying all the property taxes and utilities up to the day you no longer have possession. If you close in the middle of the month, you will be responsible for half the months taxes and utilities. If you are on equalized payments, and you have run a deficit with the utility company, expect to bring that bill current before your lawyer can discharge the mortgage! 

Capital Gains Tax

If you're selling your primary residence, you are in the clear. In Canada we don't pay tax on the appreciation of our primary residences, however, if you are selling an income property, you will be responsible to pay taxes on half the gains at your marginal income tax rate.

Property Repair

If you are looking to sell your house quickly, you will want to make sure that it is in tip top shape, don't underestimate the growing costs of fixing your property up before trying to sell it. It has been said that sellers should consider spending up to .5%-1% of the asking price on getting the property ready, making sure the small things are looked after will give people the feeling like the property was looked after . Low-cost, minor improvements like

  • Patch drywall and nail holes, repaint.
  • Fix or replace damaged flooring.
  • Repair plumbing leaks. 
  • Replace burnt out light bulbs.
  • Replace outdated light fixtures.
  • Clean out and reseal gutters.  
  • Keep up with the yard and garden.

Moving

Don't forget that once you do sell your house, it's gonna cost you money (and time) to move. Depending on how much stuff you have, you are looking at some gas money and pizza for friends, or a few hundred to a few thousand for movers. 

There you have it, by understanding these costs hopefully you will have a better idea of how much money you will actually have in your jeans after selling your house! And if you need a mortgage to buy a new one, contact me anytime!

SHARE THIS ARTICLE

RECENT POSTS

How to Qualify for a Mortgage After Bankruptcy in Canada

By Sabeena Bubber • April 8, 2026
Financial setbacks happen. Bankruptcies and consumer proposals are more common than most people realize—and they don’t define your future. Going through one doesn’t mean homeownership is off the table forever. It simply means lenders want to see that you’ve taken control, learned from the past, and built a stronger financial foundation moving forward. What lenders look at after a bankruptcy or consumer proposal How long it’s been since your discharge Your discharge date matters. For lenders, this is your reset point. There’s no law that says you must wait a specific amount of time before applying for a mortgage, but the longer your track record after discharge, the stronger your application becomes. What matters most is how responsibly you’ve managed your finances since then. Your credit rebuild Re-establishing credit is critical. After discharge, most people start with a secured credit card and use it consistently and responsibly. To be considered fully re-established, lenders typically want to see: Two active trade lines At least two years of clean payment history Credit limits of around $2,500 on each No late or missed payments Your down payment or equity The more money you can put down—or the more equity you have when refinancing—the lower the risk for the lender. A stronger down payment often opens the door to better terms and more lender options. Your debt service ratios Lenders will also look closely at how much of your income goes toward housing and other debts. The stronger your income relative to your monthly obligations, the easier it is to qualify. Conventional vs. insured mortgage options To access the most competitive mortgage products, lenders typically want to see: At least two years plus one day since discharge Fully re-established credit Minimum down payment requirements met Mortgage insurance in place if your down payment is under 20% (through CMHC, Sagen, or Canada Guaranty) Total debt obligations generally not exceeding 44% of your gross income Alternative lending options Not every situation fits neatly into a bank’s box—and that’s where alternative lending can help. Independent mortgage professionals work with both traditional and alternative lenders, including those who specialize in complex financial situations. These lenders look at the full picture: equity, income stability, and your plan moving forward. While rates and terms may not be as competitive as prime lending, alternative financing can be an effective short-term solution—especially if you need a mortgage before your credit is fully rebuilt. Let’s talk about your next step Whether you’re planning ahead for the best possible mortgage—or need a solution sooner rather than later—there are options available. If you’d like help mapping out a clear path forward, reach out anytime. I’d be happy to review your situation and help you build a plan that gets you back into homeownership with confidence.

Need Funds Between Buying and Selling? Here’s How Deposit Loans & Bridge Financing Help

By Sabeena Bubber • April 1, 2026
You’ve outgrown your current home. It no longer fits your life, so moving makes sense. And you’re not interested in juggling two properties. Selling first and buying something new feels like the right move. Ideally, you want possession of the new home before leaving the old one. That overlap makes moving easier, reduces stress, and gives you time to paint, renovate, or settle in before the boxes arrive. But there’s a common challenge. What if the down payment for your next home is tied up in the equity of the one you’re selling? That’s where bridge financing comes in. How bridge financing works Bridge financing temporarily unlocks equity from your current home once it has a firm sale . It bridges the gap between selling your existing property and purchasing your next one, allowing you to use that equity toward your down payment. What about competitive markets? In a hot market, a strong offer often means a larger deposit . If you don’t have that cash sitting in your account, but you do have equity, a deposit loan can help you compete with confidence. The non-negotiable requirement To qualify for bridge financing or a deposit loan, your current home must have a firm, unconditional sale . No firm sale = no bridge or deposit loan. Lenders need certainty to calculate available equity and manage risk. Bottom line A firm sale is the key that unlocks bridge financing and deposit loans. If you’re planning a move and want to understand how these options could work for you, let’s talk. I’m always happy to walk you through your options and help you plan your next step with confidence.

Your Guide to Real Estate Investment in Canada

By Sabeena Bubber • March 25, 2026
Your Guide to Real Estate Investment in Canada Real estate has long been one of the most popular ways Canadians build wealth. Whether you’re purchasing your first rental property or expanding an existing portfolio, understanding how real estate investment works in Canada—and how it’s financed—is key to making smart decisions. This guide walks through the fundamentals you need to know before getting started. Why Canadians Invest in Real Estate Real estate offers several potential benefits as an investment: Long-term appreciation of property value Rental income that can support cash flow Leverage , allowing you to invest using borrowed funds Tangible asset with intrinsic value Portfolio diversification beyond stocks and bonds When structured properly, real estate can support both income and long-term net worth growth. Types of Real Estate Investments Investors typically focus on one or more of the following: Long-term residential rentals Short-term or vacation rentals (subject to local regulations) Multi-unit residential properties Pre-construction or assignment purchases Value-add properties that require renovations Each type comes with different financing rules, risks, and return profiles. Down Payment Requirements for Investment Properties In Canada, investment properties generally require higher down payments than owner-occupied homes. Typical minimums include: 20% down payment for most rental properties Higher down payments may be required depending on: Number of units Property type Borrower profile Lender guidelines Down payment source, income stability, and credit history all play a role in approval. How Rental Income Is Used to Qualify Lenders don’t always count 100% of rental income. Depending on the lender and mortgage product, they may: Use a rental income offset , or Include a percentage of rental income toward qualification Understanding how income is treated can significantly impact borrowing power. Financing Options for Investors Investment financing can include: Conventional mortgages Insured or insurable options (in limited scenarios) Alternative or broker-only lenders Refinancing equity from existing properties Purchase plus improvements for value-add projects Access to multiple lenders is often crucial for investors as portfolios grow. Key Costs Investors Should Plan For Beyond the purchase price, investors should budget for: Property taxes Insurance Maintenance and repairs Vacancy periods Property management fees (if applicable) Legal and closing costs A realistic cash-flow analysis is essential before buying. Risk Considerations Like any investment, real estate carries risk. Key factors to consider include: Interest rate changes Market fluctuations Tenant turnover Regulatory changes Liquidity (real estate is not easily sold quickly) A strong financing structure can help manage many of these risks. The Role of a Mortgage Professional Investment mortgages are rarely “one-size-fits-all.” Lender policies vary widely, especially as you acquire more properties. Working with an independent mortgage professional allows you to: Compare multiple lender strategies Structure financing for long-term growth Preserve flexibility as your portfolio evolves Avoid costly mistakes early on Final Thoughts Real estate investment in Canada can be a powerful wealth-building tool when approached with a clear strategy and proper financing. Whether you’re exploring your first rental property or planning your next acquisition, understanding the numbers—and the lending landscape—matters. If you’d like to discuss investment property financing, run the numbers, or explore your options, feel free to connect. A well-planned mortgage strategy can make all the difference in long-term success.

LET'S TALK

SABEENA BUBBER

MORTGAGE BROKER | AMP

Contact Us