Closing costs when buying a home
Your down payment isn't the only cash you need on closing day. Closing costs are the one-time fees to finalize a home purchase, and they catch a lot of first-time buyers off guard. A common rule of thumb is to budget roughly 1.5% to 4% of the purchase price on top of your down payment.
The big one: land transfer tax
Most provinces charge a land transfer tax when a property changes hands, calculated as a percentage of the purchase price. Toronto adds a second, municipal land transfer tax on top of Ontario's.
This is usually the largest closing cost. First-time buyers may qualify for rebates in Ontario, Toronto, British Columbia and PEI — confirm the current amount with your province or municipality.
Keep reading: How much down payment you need · First-time home buyer programs. For the official rules, see CMHC — mortgage loan insurance for consumers.
Legal, inspection and insurance costs
- Legal fees and disbursements: a real-estate lawyer or notary handles the paperwork and title transfer — typically a four-figure cost.
- Home inspection: optional but wise, especially for resale homes.
- Title insurance: a one-time premium protecting against title defects and fraud.
- Appraisal fee: sometimes required by your lender to confirm the home's value.
Other costs to expect
- Property tax and utility adjustments: reimbursing the seller for amounts they've prepaid past your closing date.
- PST on mortgage default insurance: in some provinces (like Ontario, Quebec and Saskatchewan) the sales tax on your CMHC/Sagen premium must be paid in cash at closing — it can't be added to the mortgage.
- Moving costs, and any immediate repairs or appliances.
Frequently asked
Can I roll closing costs into my mortgage?
Generally no — most closing costs must be paid in cash at closing. Lenders usually want to see that you have enough set aside (often about 1.5% of the price) in addition to your down payment.
How much are legal fees to buy a home?
Legal fees and disbursements are commonly in the four-figure range, varying by province and the complexity of the deal. Get a quote from your lawyer or notary up front.
Sources
General information for Canadian readers, not individualized financial, tax or investment advice. Figures reflect the date reviewed; confirm current limits and rules with the CRA or a qualified professional before acting.