What extra costs are part of my mortgage?

Joel Olson • February 13, 2017

Lawyer Costs: We estimate that it’s about $1500. This includes all the legal fees, title insurance, etc. This is not

something we charge, it’s just an estimate of what your lawyer will charge.


Property Transfer Tax: This is a tax applicable in both British Columbia and Ontario. The tax is charged as 1% of

the first $200,000 of the purchase price and 2% of the balance of the purchase price. If you have never owned

property anywhere in the world, you will probably qualify for an exemption on this. In the case of two people buying

a home, we have a strategy where you may also be exempt on your next house. This will save you thousands, so

be sure to make sure we have talked about this, if we haven’t already.


Here’s some more information on Property Transfer Taxes: http://www2.gov.bc.ca/gov/content/taxes/property-

taxes/property-transfer-tax/understand/exemptions


Property Tax: You will have to pay the seller back for any property taxes they have paid. For example if the owner

paid $2000 in July, and you buy in December, you will have to pay $1000 back. A very confusing part of this can be

if the lender is paying your property taxes. In this case, upon starting the loan they will begin collecting for the next

tax year. With most tax years beginning in July, there is a strong possibility that when you buy a home you will be

behind in the tax year. As a result, you can expect that your property tax payments will reflect that in the coming

year. If you are less than four months until property taxes are due, you will have to pay your property taxes upfront

at the lawyer at the time of closing.


CMHC or Default Insurance Fee: You will see this on your documents at the lawyer. This is not a cost you have to

pay, it is added to your mortgage. There is no way around it, as the government adds this to every mortgage where

less than 20% is put down as a down payment. This insurance protects the lender so that if you default on your

payments, the government pays back the money the lender has lost. This is not to be confused with house

insurance or life and disability insurance.


Lender and Broker Fees: These are fees charged by the lender and deducted from the money you are getting.

The broker fees are not actually given to us, the brokers, in their entirety. The broker fees are also paid to the

lender and then shared with the brokers.
Joel Olson
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3 Questions To Ask Yourself Before Listing Your Home!

By Joel Olson • April 8, 2025
Deciding to list your home for sale is a big decision. And while there are many reasons you might want/need to sell, here are 3 questions you should ask yourself; and have answers to, before taking that step. What is my plan to get my property ready for sale? Assessing the value of your home is an important first step. Talking with a real estate professional will help accomplish that. They will be able to tell you what comparable properties in your area have sold for and what you can expect to sell your property for. They will also know specific market conditions and be able to help you put a plan together. But as you’re putting together that plan, here are a few discussion points to work through. A little time/money upfront might increase the final sale price. Declutter and depersonalize Minor repairs A fresh coat of interior/exterior paint New fixtures Hire a home stager or designer Exterior maintenance Professional pictures and/or virtual tour But then again, these are all just considerations; selling real estate isn’t an exact science. Current housing market conditions will shape this conversation. The best plan of action is to find a real estate professional you trust, ask a lot of questions, and listen to their advice. What are the costs associated with selling? Oftentimes it’s the simple math that can betray you. 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; the rest is profit! Well, not so fast. Costs add up when selling a home. Here is a list of costs you’ll want to consider. Real estate commissions (plus tax) Mortgage discharge fees and penalties Lawyer’s fees Utilities and property tax account settlements Hiring movers and/or storage fees Having the exact figures ahead of time allows you to make a better decision. Now, the real wildcard here is the potential mortgage penalty you might pay if you break your existing mortgage. If you need help figuring this number out, get in touch! What is my plan going forward? If you’re already considering selling your home, it would be fair to guess that you have your reasons. But as you move forward, make sure you have a plan that is free of assumptions. If you plan to move from your existing property to another property that you will be purchasing, make sure you have worked through mortgage financing ahead of time. Just because you’ve qualified for a mortgage in the past doesn’t mean you’ll qualify for a mortgage in the future. Depending on when you got your last mortgage, a lot could have changed. You’ll want to know exactly what you can qualify for before you sell your existing property. If you’d like to talk through all your options, connect anytime! It would be a pleasure to work with you and provide you with professional, unbiased advice.

What is a “No-Frills” Mortgage?

By Joel Olson • March 25, 2025
A no-frills service or product is where non-essential features have been removed from the product or service to keep the price as low as possible. And while keeping costs low at the expense of non-essential features might be okay when choosing something like which grocery store to shop at, which economy car to purchase, or which budget hotel to spend the night, it’s not a good idea when considering which lender to secure mortgage financing. Here’s why. When securing mortgage financing, your goal should be to pay the least amount of money over the term. Your plan should include having provisions for unexpected life changes. Unlike the inconvenience of shopping at a store that doesn’t provide free bags, or driving a car without power windows, or staying at a hotel without any amenities, the so-called “frills” that are stripped away to provide you with the lowest rate mortgage are the very things that could significantly impact your overall cost of borrowing. Depending on the lender, a “no-frills” mortgage rate might be up to 0.20% lower than a fully-featured mortgage. And while this could potentially save you a few hundreds of dollars over a 5-year term, please understand that it could also potentially cost you thousands (if not tens of thousands) of dollars should you need to break your mortgage early. So if you’re considering a “no-frills” mortgage, here are a few of the drawbacks to think through: You'll pay a significantly higher penalty if you need to break your mortgage. You'll have limited pre-payment privileges. Potential limitations if you want to port your mortgage to a different property. You might be limited in your ability to refinance your mortgage (without incurring a considerable penalty). Simply put, a “no-frills” mortgage is an entirely restrictive mortgage that leaves you without any flexibility. There are many reasons you might need to keep your options open. You might need to break your term because of a job loss or marital breakdown, or maybe you decide to take a new job across the country, or you need to buy a property to accommodate your growing family. Life is unpredictable; flexibility matters. So why do banks offer a no-frills mortgage anyway? Well, when you deal with a single bank or financial institution, it’s the banker’s job to make as much money from you as possible, even if that means locking you into a very restrictive mortgage product by offering a rock bottom rate. Banks know that 2 out of 3 people break their mortgage within three years (33 months). However, when you seek the expert advice of an independent mortgage professional, you can expect to see mortgage options from several institutions showcasing mortgage products best suited for your needs. We have your best interest in mind and will help you through the entire process. A mortgage is so much more than just the lowest rate. If you have any questions about this, or if you’d like to discuss anything else mortgage-related, please get in touch. Working with you would be a pleasure!