Understanding Closing Costs: What Every Homebuyer in Ontario Should Know
Category: First-Time Buyer Tips | Mortgage Basics
Tags: Closing Costs, Ontario Real Estate, First-Time Buyers, Mortgage Tips
What Are Closing Costs?
When buying a home, many buyers—especially first-time buyers—focus solely on the down payment. But there’s another crucial expense that you must plan for: closing costs.
Closing costs are one-time fees you pay on the day your home purchase is finalized (also known as the closing date). These costs cover legal, administrative, and other services needed to complete your home transaction.
How Much Are Closing Costs in Ontario?
In general, closing costs range from 1.5% to 4% of your home’s purchase price. On a $600,000 home, that’s roughly $9,000 to $24,000.
Breakdown of Typical Closing Costs in Ontario
🏛️ Land Transfer Tax (LTT)
Provincial LTT is payable on all home purchases in Ontario.
If you’re buying in Toronto, you’ll pay an additional Municipal LTT.
First-time buyers may qualify for a rebate of up to:
$4,000 (Ontario)
$4,475 (Toronto)
💡 Tip: Use our Land Transfer Tax Calculator to estimate your amount.
🧑⚖️ Legal Fees and Disbursements
Expect to pay between $1,000 and $2,000.
Covers:
**Title search
**Registration of the mortgage
**Legal advice
**Disbursements (courier, photocopies, etc.)
🛡️ Title Insurance
One-time fee of $250–$500.
Protects against title fraud, survey issues, and other hidden ownership defects.
🧾 Home Inspection Fee (Optional but Recommended)
Around $400–$600.
Helps identify potential structural or safety issues before you finalize the deal.
🏠 Appraisal Fee
May be required by your lender to confirm the value of the home.
Usually costs $300–$800.
Sometimes covered by the lender.
🔥 Property Tax & Utility Adjustments
You’ll reimburse the seller for prepaid property taxes or utility bills
This amount varies depending on your closing date.
📦 Moving Costs
Depending on the size and distance, professional movers can cost between $500 and $2,000.
🏦 CMHC Insurance Premium (If Applicable)
If your down payment is less than 20%, you’ll pay mortgage default insurance.
While the premium is added to your mortgage, the 8% PST on that premium must be paid upfront at closing (in Ontario).
Closing Cost Example on a $600,000 Home
| Cost Item | Estimated Cost |
|---|---|
| Land Transfer Tax | $8,475 (less rebate) |
| Legal Fees + Disbursements | $1,500 |
| Title Insurance | $400 |
| Appraisal Fee | $400 |
| Home Inspection | $500 |
| Property Tax Adjustment | $800 |
| PST on CMHC Insurance | $1,200 |
| Total Estimated Costs | ~$13,275 |
✅ Tips to Prepare for Closing Costs
Budget early: Include 1.5%–4% of your purchase price as part of your savings goal.
Ask your mortgage agent or lawyer for a detailed estimate early in the buying process.
Know your rebate eligibility if you’re a first-time homebuyer.
💡 Need Help Calculating Your Closing Costs?
Reach out for a personalized estimate based on your purchase price, location, and financing details. Or try our Free Closing Cost Calculator to get a quick breakdown.
📞 Ready to Buy? Let’s Make Sure You’re Financially Prepared
Whether you’re a first-time buyer or a seasoned homeowner, understanding all the costs involved will help you avoid surprises on closing day.
Contact us today at 416.564.6437 or email at anilg@dominionlending.ca to get pre-approved, estimate your closing costs, and make confident decisions with expert advice.