Many first-time buyers focus on the down payment and forget about closing costs. These additional expenses typically range from 1.5% to 4% of the purchase price—a significant amount that needs to be factored into your home buying budget.
Beyond the Down Payment
On a $600,000 home, closing costs mean $9,000 to $24,000 on top of your down payment.
Land Transfer Tax
The biggest closing cost in most provinces:
Ontario
- 0.5% on first $55,000
- 1% on $55,001 to $250,000
- 1.5% on $250,001 to $400,000
- 2% on amounts over $400,000
- Toronto adds another 2%
First-Time Buyer Rebates
- Ontario: Up to $4,000 rebate
- Toronto: Additional $4,475 rebate
Check your province's specific rates—they vary significantly.
Legal Fees
Expect to pay $1,500 to $2,500 for:
- Title search and examination
- Document preparation
- Registration of mortgage
- Closing adjustments calculation
- Trust account administration
Planning Your Budget?
Use our Closing Costs Calculator to get a personalized estimate for your purchase, or get pre-approved and we'll help you plan for all your costs.
Title Insurance
Protects against:
- Title defects discovered later
- Survey issues
- Fraud
- Zoning violations
Cost: $300 – $500
Most lenders require it, and it protects you too.
Home Inspection
Essential but technically optional:
- General inspection: $400 – $600
- Specialized inspections: $200 – $400 each
- Radon testing
- Mold inspection
- Pest inspection
- Septic inspection
Never skip the inspection on a resale home.
Appraisal Fees
- Often covered by lender
- If required: $300 – $500
- May need specialty appraiser for unique properties
Other Costs to Consider
| Cost | Typical Amount |
|---|---|
| Property insurance (required) | $1,000 – $2,500/year |
| Moving expenses | $500 – $3,000 |
| Utility deposits | $100 – $300 |
| Immediate repairs | Varies |
| CMHC premium (if applicable) | Added to mortgage |
Sample Closing Cost Calculation
For a $600,000 home in Ontario:
| Cost | Amount |
|---|---|
| Land Transfer Tax | $8,475 |
| Legal Fees | $2,000 |
| Title Insurance | $400 |
| Home Inspection | $500 |
| Appraisal | $0 (lender covered) |
| Total | $11,375 |
First-time buyer with rebate: $11,375 - $4,000 = $7,375
FAQ
Q: Can closing costs be added to the mortgage?
A: Generally no. Closing costs must be paid from your own funds at closing.
Q: Are closing costs tax-deductible?
A: Not for principal residences. Investment properties may be different.
Q: What's a closing adjustment?
A: Reimbursing the seller for prepaid property taxes, condo fees, etc. pro-rated to closing date.
Q: When are closing costs due?
A: Your lawyer collects them before closing. Have funds ready about a week before.
What's Next
Get pre-approved and we'll help you plan your complete home purchase budget, including all closing costs.
Ready to Get Started?
Contact us today for personalized mortgage advice and competitive rates.
