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 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 0,000 home in Ontario: 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 What's Next Get pre-approved and we'll help you plan your complete home purchase budget, including all closing costs. 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. Know Your True Costs Closing costs can add thousands to your purchase. Use our calculator to budget accurately. Calculate Costs 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 Close the Deal? Get a complete breakdown of all costs involved in your home purchase. No surprises at closing. Get Full Estimate Call (416) 822-7357 Frequently Asked Questions 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. 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 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. 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.
