Real estate commission
Commission is negotiable and is split between the listing side and the buyer's side. It is deducted at closing by your lawyer. Ask exactly what the number covers - photography, staging, floor plans and marketing are sometimes included and sometimes billed separately.
The mortgage penalty, the one people miss
Breaking a fixed mortgage before the end of the term usually triggers an interest rate differential penalty, which can run into five figures. A variable mortgage is normally three months' interest. Before you list, ask your lender for the exact discharge figure in writing, and ask your broker whether porting the mortgage to the next home avoids the penalty entirely.
- Fixed term: interest rate differential, often thousands
- Variable term: usually three months' interest
- Porting can eliminate the penalty if the timing lines up
Legal fees, discharge fees, and adjustments
Your lawyer handles the discharge of the existing mortgage and the payout statement. Expect legal fees, a lender discharge fee, and adjustments for property tax and utilities already paid. None are large on their own; together they are worth budgeting for.
When the closings do not line up
Selling on the fifteenth and buying on the first leaves a gap you have to fund. Bridge financing covers the down payment on the new home until the sale proceeds arrive. It is short-term, interest is charged only for the days used, and it needs to be arranged before closing, not during the week of.
Frequently asked questions
- How do I find out my exact mortgage penalty?
- Request a written payout or discharge statement from your lender. Online calculators give estimates only, and the difference can be thousands.
- Can I avoid the penalty by moving my mortgage to the new home?
- Often yes, through porting, if the closings are close together and the new property qualifies. Your broker can confirm the lender's rules.
- What if my purchase closes before my sale?
- Bridge financing covers the gap. It has to be set up in advance, so tell your broker the two closing dates as soon as you have them.