Closing costs are a list of charges your lawyer will present to you before the closing date of your home.  According to the Canada Mortgage and Housing Corporation you should have at least 2.5% of the purchase price for closing costs in addition to the down payment.    Below you will find a brief explanation of these costs.  Please note these are some of the closing costs you may encounter depending on your specific situation.  Use this as a guideline then talk with your lawyer who can provide a more specific estimate for your situation.

Appraisal Fee  An appraisal provides the lender with a professional opinion of the market value of the property.  This cost is normally about $200. Home Inspection A professional inspection of the home, top to bottom, is for your benefit. A home inspection can cost anywhere from $300 - $400+ and is well worth the investment.  We will only recommend professional engineers who are members of the Home Inspector Association and are covered with appropriate errors & omissions insurance.

Fire Insurance

In order to take out a mortgage you will require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality.  

Provincial Sales Tax on Mortgage Insurance

If your mortgage is insured, (CMHC or Genworth Financial), you will be required to pay the applicable taxes on the insurance premium on closing.  While the insurance premium can be added to the mortgage amount, the tax must be paid at closing.

Land Survey Fee or Title Insurance Fee

A recent survey of the property is usually required by lenders.  If one is not available the cost can range from $1000 and up for a new survey.  In lieu of the survey most lenders today will accept title insurance which costs considerably less. It is a one time fee based on the value of your home. See the section further down "Title Insurance Explained".

Legal Costs and Disbursements

Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing the mortgage, and conducting the various searches.

Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies.

Land Transfer Tax Most provinces charge a land transfer tax payable by the buyer. Land transfer tax is based on the purchase price.  Here in Toronto we have two types of land transfer tax, one to the province and one to the municipality. If you are a first time home buyer you may be entitled to a refund. See the section below "Land Transfer Tax" for calculations. New Home Warranty New homes in Ontario are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount.  For more information on Ontario new home warranty visit http://www.tarion.com.

HST

HST is payable on the purchase of newly constructed homes & condos only.  If you are purchasing a new home make sure you know who pays this, you or the builder.  On the offer the purchase price will say "Plus HST" or "HST Included" and who gets any HST rebates.  Many builders have included this cost into the purchase price so the buyer does not have to come up with it at closing. If you are considering a new home or condo purchase, give us a call. We can help negotiate better terms with the builder than you may otherwise be able to do. We are very experienced in negotiating and are familiar with what kinds of flexibility builders may have. Additionally there is no cost to you! Most builders will pay us as long as we visit the site together the first time.

Closing Adjustments

An estimate should be made for closing adjustments for expenses the seller has prepaid such as property taxes, utility bills, and other charges.  Any bills after the closing date are the responsibility of the buyer.  A lawyer will let you know what they are once the various searches have been completed.

For more information on closing costs please complete the form below.