Closing Costs
Definition
Closing costs are the one-time expenses beyond your down payment that you must pay to complete a purchase — typically 1.5% to 4% of the purchase price.
How it works
The largest single item in most provinces is land transfer tax, followed by legal fees and disbursements, title insurance, and the property tax or utility adjustments that reimburse the seller for amounts they prepaid.
Other common items include a home inspection, an appraisal if the lender orders one and passes on the cost, moving costs, and — if you are buying a newly built home — GST or HST on the purchase price. Lenders will usually want proof you have roughly 1.5% of the price available for these costs on top of the down payment.
Closing costs are almost entirely predictable in advance. Getting a written estimate early prevents the most common last-minute problem in a purchase: having enough for the down payment but not enough to actually close.
Quick facts
- Budget roughly 1.5%–4% of the purchase price.
- Lenders often require proof of 1.5% for closing costs.
- Land transfer tax is usually the biggest line item.
Put this into practice
Still have questions about closing costs?
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