When budgeting for a home purchase, many buyers focus on the down payment and forget about closing costs. In Ontario, you should budget an additional 3-5% of the purchase price for costs that come due on closing day.
Closing Cost Breakdown
Land Transfer Tax — The Biggest Cost
This is typically the largest closing cost. On a $700,000 home:
- Ontario LTT: $10,475
- Toronto MLTT (if applicable): $10,475
- First-time buyer rebates: Up to $8,475 off
Legal Fees: $1,500 - $2,500
Your real estate lawyer handles title search, mortgage registration, document preparation, and fund disbursement. Get quotes from several lawyers — fees vary significantly.
Title Insurance: $300 - $500
Protects you against title defects, survey issues, and certain types of fraud. Most lenders require this.
Home Inspection: $400 - $600
A thorough inspection of the property's condition. Strongly recommended even in a seller's market.
Appraisal Fee: $300 - $500
Your lender may require an appraisal to confirm the property's value. Some lenders cover this cost.
Mortgage Insurance (CMHC): 2.8% - 4.0% of mortgage
Required if your down payment is less than 20%. This is typically added to your mortgage principal, not paid upfront.
Property Tax and Utility Adjustments: Varies
If the seller has prepaid property taxes or utilities past the closing date, you'll reimburse them for the balance.
Moving Costs: $1,000 - $3,000
Professional movers, truck rental, packing supplies, and associated costs.
Example: $700,000 Home (First-Time Buyer, Outside Toronto)
| Item | Cost |
|---|---|
| Ontario Land Transfer Tax | $10,475 |
| First-Time Buyer Rebate | -$4,000 |
| Legal Fees | $2,000 |
| Title Insurance | $400 |
| Home Inspection | $500 |
| Appraisal | $350 |
| Moving | $1,500 |
| Total Estimated Closing Costs | $11,225 |
Plan ahead and budget for these costs early in your home search. Calculate your land transfer tax and estimate your mortgage to build a complete picture of your costs.