Home Buying Closing Costs Guide
Understanding the additional expenses beyond your down payment when buying a home in Canada
Understanding Closing Costs
When budgeting for a home purchase, many buyers focus solely on the down payment and mortgage payments. However, closing costs—the additional expenses required to complete your real estate transaction—can add significantly to your required funds. In Canada, these costs typically range from 1.5% to 4% of the purchase price.
Typical Closing Cost Categories
Government Fees & Taxes
- • Land transfer tax
- • GST/HST (new homes only)
- • Property tax adjustments
- • Registration fees
Professional Services
- • Legal fees and disbursements
- • Home inspection costs
- • Appraisal fees
- • Surveying costs (if required)
Insurance & Protections
- • Title insurance
- • Home insurance (first year premium)
- • Mortgage default insurance
- • Mortgage life insurance (optional)
Other Expenses
- • Moving costs
- • Utility hookup fees
- • Condominium estoppel certificates
- • Adjustments for prepaid services
Detailed Closing Cost Breakdown
| Expense | Typical Cost | When Paid | Required? |
|---|---|---|---|
| Land Transfer Tax Provincial tax levied when property changes hands. Varies by province and property value. | 0.5% to 2.5% of purchase price | At closing | Required |
| Legal Fees Lawyer fees for handling the transaction, title search, and registration. | $1,000 to $2,500 | At closing | Required |
| Title Insurance One-time premium that protects against title defects and fraud. | $250 to $500 | At closing | Required |
| Property Appraisal Professional assessment of home value, often required by lenders. | $300 to $500 | Before closing | Required |
| Home Inspection Detailed examination of property condition by a professional inspector. | $350 to $600 | Before closing | Varies |
| Property Tax Adjustment Reimbursement to seller for any prepaid property taxes. | Prorated amount | At closing | Required |
| Estoppel Certificate Fee (Condos) Document verifying condo fees and status of reserve fund. | $100 to $300 | Before closing | Required |
| Mortgage Default Insurance Required for down payments less than 20%, protects the lender. | 2.8% to 4.0% of mortgage amount | Added to mortgage or at closing | Varies |
| Property Insurance Year's premium for home insurance, often required by lender. | $800 to $1,500 annually | Before closing | Required |
| GST/HST on New Homes Federal and provincial tax on newly built homes. | 5% to 15% of purchase price | At closing | Required |
| Mortgage Application & Processing Administrative fees charged by lender. | $200 to $400 | At application or closing | Varies |
| Utility Account Setup Fees to establish new utility accounts. | $50 to $300 | Before moving in | Required |
Closing Cost Calculator
Use this simple calculator to estimate your total closing costs based on your purchase price and location.
Quick Estimate
For a rough estimate, budget:
- • 1.5-2.5% of purchase price (outside Toronto)
- • 3-4% of purchase price (in Toronto)
- • 1-2% of purchase price (in Alberta)
- • Add 2-4% for CMHC insurance if down payment is less than 20%
Common Mistakes to Avoid
Not budgeting for all costs
Many buyers forget about adjustment costs and moving expenses.
Forgetting about GST/HST on new homes
This can add 5-15% to the purchase price if not included.
Skipping home inspection to save money
Short-term savings could lead to costly problems later.
Not checking first-time buyer rebates
Rebates are set by each province and municipality; check the official rules before closing.
Additional Resources
Related Guides
Related Resources
Checking a figure on this page? Open the home cost source ledger for every primary source we cite, when its link was last checked, and what it does not establish.