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:
| Purchase Price | Estimated Closing Costs | 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
| Home Value | 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
| Province | Rate | 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:
| Province/City | Maximum Rebate | 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:
| Fee | 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:
| Down Payment | Premium (% of Mortgage) | On $500K 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
| Service | Cost | 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
FAQ
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.
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.
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