In This Article Closing Costs Overview Land Transfer Tax: The Big One Ontario Land Transfer Tax Other Provinces First-Time Buyer Rebates Calculate Your Closing Costs Legal Fees and Disbursements Title Insurance Home Insurance CMHC Insurance Premium Optional (But Recommended) Costs Moving and Setup Costs FAQ What's Next More on this topic More on this topic What Are Closing Costs? The Major Closing Costs Land Transfer Tax (Provincial) Toronto Municipal Land Transfer Tax Legal Fees and Disbursements Title Insurance Home Inspection Appraisal Fee Additional Closing Costs Property Tax Adjustment Condo Costs (If Applicable) Utility Hook-Ups Moving Expenses Home Insurance First-Time Buyer Programs to Reduce Costs First Home Savings Account (FHSA) RRSP Home Buyers' Plan Land Transfer Tax Rebates Tips to Minimize Closing Costs 1. Compare Legal Fee Quotes 2. Ask About Lender Credits 3. Negotiate with the Seller 4. Time Your Closing 5. Bundle Insurance FAQ Table of Contents Closing costs catch many first-time buyers off guard. Beyond your down payment, you'll need an additional 1.5-4% of the purchase price for closing costs. This guide breaks down every expense you'll encounter so there are no surprises on closing day. Closing Costs Overview Here's a quick reference for budgeting: Total Cash Needed (5% Down) $400,000 $6,000 - $16,000 $26,000 - $36,000 $600,000 $9,000 - $24,000 $44,000 - $59,000 $800,000 $12,000 - $32,000 $67,000 - $87,000 Note: Ranges depend heavily on your province (land transfer tax) and property type. Land Transfer Tax: The Big One Land transfer tax (LTT) is typically your largest closing cost. Rates vary significantly by province: Ontario Land Transfer Tax Marginal Rate Up to $55,000 0.5% $55,000 - $250,000 1.0% $250,000 - $400,000 1.5% $400,000 - $2,000,000 2.0% Over $2,000,000 2.5% Toronto buyers: Add the Municipal Land Transfer Tax on top (similar structure, effectively doubling LTT). Other Provinces Notes British Columbia 1-3% Progressive rates Alberta $0 No land transfer tax! Manitoba 0.5-2% Progressive rates Quebec 0.5-1.5% "Welcome tax" Nova Scotia 1.5% Flat rate Use our Land Transfer Tax Calculator to get your exact amount. First-Time Buyer Rebates If you're a first-time buyer, you may qualify for significant rebates: Conditions Ontario $4,000 Home value under $368,000 for full rebate Toronto $4,475 Additional municipal rebate BC Full exemption Home under $500,000 PEI Full exemption All first-time buyers Calculate Your Closing Costs Don't leave anything to chance. Use our Closing Costs Calculator to get a detailed estimate for your specific situation. Legal Fees and Disbursements You'll need a real estate lawyer to complete your purchase: Typical Amount Legal fees $1,000 - $2,000 Title search $100 - $200 Registration fees $150 - $300 Courier/admin $50 - $150 Total legal costs $1,500 - $2,500 Tip: Get quotes from multiple lawyers. Prices vary, but cheaper isn't always better—experience with real estate transactions matters. Title Insurance Title insurance protects against issues with property ownership: Typical cost: $300 - $500 (one-time) What it covers: Fraud, survey issues, title defects, unpaid liens Required? Most lenders require lender's coverage; owner's coverage is optional but recommended Learn more in our title insurance guide. Home Insurance Lenders require proof of home insurance before closing: Typical cost: $100 - $200/month When needed: Policy must be in place by closing day Tip: Shop around—rates vary significantly between providers CMHC Insurance Premium If your down payment is less than 20%, mortgage default insurance is required: On 0K Mortgage 5% 4.00% $19,000 10% 3.10% $13,950 15% 2.80% $11,900 Note: The premium is typically added to your mortgage, not paid at closing—but it increases your total mortgage amount. Optional (But Recommended) Costs Why It Matters Home inspection $400 - $600 Identifies issues before you commit Property survey $500 - $1,500 Confirms boundaries (may be required) Septic/well inspection $200 - $500 Rural properties Condo status certificate $100 - $150 Reveals condo corporation health Moving and Setup Costs Don't forget the costs of actually moving in: Professional movers: $500 - $2,000+ Utility connections: $50 - $200 Immediate repairs/upgrades: $500 - $5,000+ New furniture/appliances: Variable What's Next Don't let closing costs derail your home purchase. Use our calculator to know exactly what you'll need, and get pre-approved to understand your complete home-buying budget. More on this topic More on this topic What Are Closing Costs? Closing costs are the fees and expenses you pay when finalizing your home purchase, beyond the down payment and mortgage. They typically range from 1.5% to 4% of the purchase price. For a $500,000 home: Budget $7,500 to $20,000 in closing costs. The Major Closing Costs Land Transfer Tax (Provincial) Most provinces charge a tax on property purchases: Ontario: Tax Rate Up to $55,000 0.5% $55,001 - $250,000 1.0% $250,001 - $400,000 1.5% $400,001 - $2,000,000 2.0% Over $2,000,000 2.5% Ontario First-Time Buyer Rebate: Up to $4,000 BC: Tax Rate Up to $200,000 1.0% $200,001 - $2,000,000 2.0% Over $2,000,000 3.0% BC First-Time Buyer Exemption: Full exemption up to $500,000 Other provinces vary. Use our Land Transfer Tax Calculator for your specific situation. Toronto Municipal Land Transfer Tax If you're buying in Toronto, you pay an additional municipal tax that mirrors the provincial rates—effectively doubling your land transfer tax. Toronto First-Time Buyer Rebate: Up to $4,475 Legal Fees and Disbursements Your real estate lawyer handles: Title search and registration Document preparation Mortgage registration Trust account management Typical cost: $1,500 - $2,500 (including disbursements) Title Insurance Protects against: Title defects Survey issues Encroachments Fraud Typical cost: $300 - $500 Home Inspection Conducted before closing (or before your offer is firm): Typical cost: $400 - $600 Appraisal Fee Sometimes required by your lender: Typical cost: $300 - $500 (may be covered by lender) Additional Closing Costs Property Tax Adjustment If the seller has prepaid property taxes beyond closing, you reimburse them: Example: Seller prepaid full year, you close July 1st = you pay 6 months of taxes Condo Costs (If Applicable) Status certificate: $100 - $200 Reserve fund contribution: Varies First month's condo fees: Due at closing Utility Hook-Ups Hydro/electricity deposit Water/sewer connection fees Gas connection fees Typical cost: $50 - $200 each Moving Expenses Often overlooked but necessary: DIY move: $200 - $500 (truck rental) Professional movers: $800 - $3,000+ Home Insurance Required before closing: Typical annual cost: $1,000 - $2,500+ First-Time Buyer Programs to Reduce Costs First Home Savings Account (FHSA) Tax-deductible contributions Tax-free growth and withdrawals Up to $40,000 lifetime contribution Can be used for down payment AND closing costs RRSP Home Buyers' Plan Withdraw up to $35,000 from RRSP Repay over 15 years Available for first-time buyers (or after 4 years without owning) Land Transfer Tax Rebates Ontario and Toronto offer rebates for first-time buyers—potentially saving $8,475 combined. Tips to Minimize Closing Costs 1. Compare Legal Fee Quotes Get quotes from 2-3 real estate lawyers. Fees vary significantly. 2. Ask About Lender Credits Some lenders offer cashback or cover certain costs (appraisal, legal fees). 3. Negotiate with the Seller In buyer's markets, sellers may contribute to closing costs. 4. Time Your Closing Close at month-end to minimize property tax adjustments. 5. Bundle Insurance Get quotes for home and auto together for discounts. Ready to Get Started? Contact us today for personalized mortgage advice and competitive rates. Get Pre-Approved Call (416) 822-7357 Frequently Asked Questions What Are Closing Costs? Closing costs are the fees and expenses you pay when finalizing your home purchase, beyond the down payment and mortgage. They typically range from 1.5% to 4% of the purchase price. For a $500,000 home: Budget $7,500 to $20,000 in closing costs. Q: Can I roll closing costs into my mortgage? A: Generally no—most closing costs must be paid from your own funds. The exception is CMHC insurance, which is typically added to your mortgage. Q: When do I pay closing costs? A: Most are due on closing day, paid through your lawyer. Your lawyer will provide a detailed Statement of Adjustments before closing. Q: What are Statement of Adjustments credits? A: The seller may owe you credits for prepaid property taxes, utility bills, or condo fees—these reduce your cash needed at closing. Q: How do I save on closing costs? A: First-time buyer rebates (LTT), shopping around for legal fees and insurance, and buying in provinces with no LTT (like Alberta) can all help. Q: Can I roll closing costs into my mortgage? A: Generally no. You need to pay closing costs from savings or other sources. Some programs allow adding CMHC premiums to the mortgage. Q: What if I don't have enough for closing costs? A: You may need to delay your purchase. Some buyers use lines of credit or family gifts. Q: Are closing costs tax-deductible? A: Not for your principal residence. Some costs may be deductible for investment properties. Q: What's the difference between closing costs and down payment? A: Down payment goes toward the home purchase. Closing costs are the additional fees for completing the transaction. Q: Do I pay GST/HST on a home purchase? A: GST/HST applies to NEW homes, not resales. Partial rebates may apply.
