Closing Costs

When you buy or refinance a home, you will need to budget for closing costs. Mortgage closing costs are fees and expenses you pay when you secure a loan for your home, beyond the down payment. These costs are generally 3 to 5 percent of the loan amount and may include title insurance, attorney fees, appraisals, taxes and more. Here is a quick look at some of the main closing costs.

Legal fees

Hiring a real estate lawyer is most important when buying a property. The total cost of  fees will depend on the going rate for lawyers in your community and the amount of work your transaction requires. Expect to pay several hundred dollars — or much more if your lawyer covers the cost of add-ons like title insurance. Need a recommendation for a Lawyer reach out to us directly.

Land transfer taxes

Each province charges some form of land transfer tax when property changes hands. The name may vary in each province but could be referred to as the “land transfer fee”, a “property transfer tax”, or a “deed transfer tax.”

Appraisal and survey fees

The appraisal and survey are used to help confirm the fair market value of your home. Fees for these services may vary but are usually between 300-500 depending on the size and location of the property.

Provincial sales tax on mortgage default insurance

When you buy a home with a down payment below 20% of the purchase price, you’ll be required to pay mortgage default insurance. With this cost you will also pay provincial sales tax on your insurance premium in Saskatchewan (6%), Ontario (8%) and Quebec (9%).

GST/HST on new construction

You may have to pay goods and services tax (GST) or harmonized sales tax (HST)  on the cost of your newly constructed home at closing, unless it’s included in your builder’s sale price.

Home inspection

Buying a home can be one of the most important, life-changing decisions you will make. The information provided in a reliable home inspection can should play a vital part in your decision-making.

A home inspection is most often used to evaluate the condition of a home before it is bought or sold. It may inform you if the home has components that are defective, damaged or unsafe.

When looking to buy a home, getting a reliable home inspection may help you avoid unwelcome surprises. A complete home inspection report can help you make more informed choices about your purchase or possible repairs that need to be made.

The cost will depend on the size, age and location of the home, but often ranges between $400 and $700.

Estoppel certificate fee

This is a fee your lawyer will require if you’re buying a condo or strata unit outside of Quebec. An estoppel certificate confirms important details about a condo unit, including any outstanding fees that you might be responsible for. Obtaining an estoppel certificate could cost only a few hundred dollars.

Land survey fee

Land surveys aren’t as common as home inspections, but your lender may require you to get one to confirm a property’s boundaries or other factors that could impact its value.

A land survey could cost thousands of dollars which would depend on the size of your lot, the reason for your survey and how labour and research intensive the survey may be to obtain.

Property taxes

Property taxes are the taxes homeowners in Canada pay on the assessed value of their home. The money is paid to the city or municipality that they live in, acting as revenue. They currently vary from 0.5 per cent to 2.5 per cent of a home's assessed value. It’s unlikely that you’ll have to pay property taxes at closing. But if the previous owner paid the property tax for the entire year and needs to be reimbursed for the time you’ll be living in the house, you’ll be the one paying for your portion of the year.

Home insurance

Your lender will require home insurance to be in place before you can close. Home insurance helps protect your home and your belongings in case of theft, loss or damage. It may also help cover additional living expenses if you're temporarily unable to live in your home. These may include living in a hotel or renting a home.

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