You've Been Saving Diligently—Now Let's Fill in the Full Picture

First, let me say this: if you're reading this post feeling a little embarrassed that you don't already know exactly how much cash you need beyond your down payment, please take a breath. You're not behind. You're not underprepared. You're doing exactly what smart, financially responsible buyers do—you're asking questions before you're standing at the lawyer's office wondering why your bank account looks different than expected.

As a REALTOR® working with first-time buyers across London—from starter homes in Westmount to townhomes near Western University to beautiful properties backing onto the Thames River in Byron—I see this scenario constantly. Couples with solid dual incomes, excellent savings habits, and careful budgets who simply weren't told the complete story about the cash needed to close.

Let's change that today.

Deposit vs Down Payment: Two Different Things

This is the point where most first-time buyers say, "Wait, what?"

Your down payment is the portion of the purchase price you're contributing (rather than financing through your mortgage). For a $550,000 townhouse in Oakridge or a $625,000 semi in Old North, you might be putting down 5-10%.

Your deposit, however, is earnest money you provide when your offer is accepted—typically within 24-48 hours of signing. This shows the seller you're serious and committed. In the London, Ontario market, deposits generally range from $10,000 to $30,000 depending on the purchase price and market conditions.

Here's the good news: your deposit forms part of your down payment. It's not additional money—it's simply a portion paid earlier in the process. The key is having those funds liquid and accessible immediately upon offer acceptance, not locked in a GIC or investment account with a 30-day notice period.

Action item: Before you start viewing homes in Masonville or Wortley Village, confirm you have deposit funds readily available in a savings account.

London Ontario First-Time Home Buyer Closing Costs: The Real Numbers

Closing costs are the expenses you'll pay on closing day beyond your down payment. For most London-area purchases, budget approximately 1.5% to 4% of your purchase price. On a $575,000 home, that's roughly $8,600 to $23,000.

Let's break down what that includes:

Land Transfer Tax

In Ontario, this is calculated on a sliding scale. For a $575,000 purchase, expect approximately $7,475 in provincial land transfer tax.

The silver lining? As first-time buyers, you're eligible for a rebate of up to $4,000, reducing your actual cost to roughly $3,475. Your lawyer will help you claim this, but you'll need to pay the full amount on closing day and receive the rebate after.

Legal Fees and Disbursements

Your real estate lawyer handles title searches, document preparation, registration, and the actual closing. In London, expect to pay between $1,500 and $2,500 for legal fees plus disbursements (the various searches and registrations they conduct on your behalf).

Title Insurance

This one-time premium (typically $300-$500) protects you against title defects, fraud, and certain survey issues. Most lenders require it, and honestly, it's worthwhile protection.

Home Inspection

While this happens before closing, it's cash out of pocket during the buying process. A thorough home inspection in London runs $400-$600 depending on the property size and any additional testing (radon, for example, is worth considering).

Adjustments

Your lawyer will calculate adjustments for prepaid property taxes, utility bills, and any other expenses the seller has paid beyond the closing date. These vary but typically add $500-$2,000 to your closing costs depending on the time of year.

The Cash Needed to Close: A Realistic Example

Let's paint the picture for a $600,000 semi-detached home in Lambeth or a move-in-ready townhouse near Talbot Village:

| Item | Approximate Cost | |------|------------------| | Down payment (10%) | $60,000 | | Land transfer tax (after rebate) | $4,100 | | Legal fees & disbursements | $2,000 | | Title insurance | $400 | | Home inspection | $500 | | Adjustments | $1,200 | | Total cash needed | $68,200 |

That's $8,200 beyond your down payment—funds that need to be available, not tied up in investments or allocated to furniture shopping.

Moving Costs: Don't Forget the Last Step

Once you've got the keys to your new place near Boler Mountain or tucked into a quiet street in the Summerset neighbourhood, you still need to get your belongings there. Professional movers in London typically charge $800-$2,000 depending on the size of your move and the distance. Even a DIY move with a rental truck runs $200-$500 plus pizza for your helpful friends.

The Emergency Reserve: Your Financial Safety Net

Here's where I get a bit direct with my buyers: please don't drain every account to close on your home.

I understand the temptation. You've been saving so diligently, watching your friends take vacations while you stockpiled cash for this goal. And now you're so close.

But homeownership comes with surprises. The furnace that works perfectly during your August possession might struggle come January. The dishwasher might have other plans. You want a financial cushion—ideally three months of expenses, but at minimum, $5,000-$10,000—sitting in reserve after closing.

This isn't pessimism. It's the same careful planning that got you here in the first place.

You're More Prepared Than You Realize

If you've been saving consistently on a combined household income of $115,000-$155,000, you're exactly the type of buyer who succeeds in London's market. You just needed someone to lay out the complete picture—and now you have it.

The deposit vs down payment distinction, the closing costs, the reserves—none of this is secret information, but it's rarely explained clearly to first-time buyers until they're mid-transaction.

Now you can plan with confidence.

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When you're ready to start exploring what's possible for your first home in London, I'd love to chat. Whether you're drawn to the village feel of Byron, the tree-lined streets of Old North, or the newer builds near Fanshawe College, let's walk through your numbers together—no pressure, no surprises.

Reach out to Nickey Calford at Calford & Co. Real Estate Team to start the conversation.

Beyond the Down Payment: The Complete Cash Guide for London, Ontario First-Time Home Buyers