Five Hidden Expenses Every First Time Home Buyer in London, Ontario Needs to Budget For

So you've been diligently saving for your down payment, scouring listings in Byron, exploring townhomes in Oakridge, or eyeing that charming starter home in Wortley Village. As a first time home buyer, you've probably got a magic number in mind—the down payment that will unlock the door to your first house.

But here's what many London buyers discover too late: your down payment is just one piece of a much larger financial puzzle. Before you decide exactly how much to put down, you need to account for several additional expenses that can catch even the most prepared buyers off guard.

1. Closing Costs: The 1.5% to 4% Surprise

Closing costs are perhaps the most significant expense that first time home buyers underestimate. In Ontario, you should budget approximately 1.5% to 4% of your purchase price for these fees.

For a typical London starter home priced around $500,000 in neighbourhoods like Lambeth or Talbot Village, that translates to $7,500 to $20,000 in additional funds you'll need on closing day.

These costs include: - Land Transfer Tax: In Ontario, this is calculated on a sliding scale. On a $500,000 home, expect to pay approximately $6,475. First time home buyers can claim a rebate of up to $4,000, but you'll still owe the difference. - Legal Fees: Budget $1,500 to $2,500 for a real estate lawyer to handle the transaction. - Title Insurance: Typically $300 to $500. - Home Inspection: Usually $400 to $600, and absolutely worth every penny.

2. Moving and Immediate Setup Costs

Whether you're relocating from a rental near Western University or moving from another city to be closer to Fanshawe College, moving costs add up quickly.

Professional movers in London typically charge $800 to $2,000 depending on the size of your move and distance. Add to that: - Utility connection fees and deposits - Mail forwarding - New locks (always recommended for your first house) - Basic tools and supplies for those inevitable first-week repairs

Budget at least $2,000 to $3,000 for a smooth transition into your new home.

3. The "Empty House" Shopping List

Your apartment came with appliances. Your new Masonville townhome might not.

Many first time home buyers in London are surprised to learn that sellers often take their appliances with them. Even if appliances are included, you may need: - A lawnmower (essential for that lovely backyard backing onto Warbler Woods) - Snow removal equipment (this is Canada, after all) - Window coverings - Basic furniture for additional rooms - Gardening tools

A realistic budget? $3,000 to $8,000, depending on what's included with the property and your current inventory.

4. Mortgage Default Insurance (If Applicable)

If your down payment is less than 20% of the purchase price, you'll need CMHC mortgage default insurance. This protects the lender—not you—but you pay the premium.

The premium ranges from 2.8% to 4% of your mortgage amount and is typically added to your mortgage balance. On a $550,000 home in Old North with a 10% down payment ($55,000), you'd be looking at approximately $15,000 to $20,000 in insurance premiums.

This doesn't require cash upfront, but it affects your overall mortgage amount and monthly payments—critical factors when determining how much you can truly afford.

5. Emergency Reserve Fund

Here's the expense that isn't really an expense—until it is.

Homeownership comes with surprises. The furnace that seemed fine during your spring showing might struggle come January. That older home near the Thames River might have a sump pump that needs replacing.

Financial experts recommend maintaining three to six months of living expenses as an emergency fund. For homeowners, this becomes even more critical. At minimum, keep $5,000 to $10,000 accessible for unexpected repairs.

The Strategic Down Payment Decision

Let's put this into perspective. Say you've saved $80,000 and you're eyeing a lovely semi-detached in Westmount listed at $575,000.

You could put down the full $80,000 (about 14%). But after accounting for: - Closing costs: ~$10,000 - Moving and setup: ~$3,000 - Appliances and essentials: ~$4,000 - Emergency fund: ~$8,000

You're looking at $25,000 in additional expenses. A down payment of $55,000 (just under 10%) might be the wiser choice, keeping you financially comfortable rather than house-poor.

Making Your First House a Smart Investment

The London, Ontario market offers incredible opportunities for first time home buyers—from established neighbourhoods with walkable amenities like Byron's village feel to newer developments in Talbot Village. But smart homeownership starts with smart planning.

Before you fall in love with that perfect property overlooking Springbank Park along Commissioners Road, make sure your budget accounts for the full picture.

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Ready to navigate your first home purchase with confidence? Nickey Calford and the Calford & Co. Real Estate Team specialize in helping first time home buyers find their perfect London home—while keeping their finances on solid ground. Reach out today for a no-pressure conversation about your homeownership goals.