What are closing costs when buying a home in Canada?

Closing costs are the expenses paid on top of your down payment when a home purchase completes. They typically include land transfer tax, legal fees, title insurance, home inspection, CMHC mortgage insurance premium (if applicable), property tax adjustments, home insurance, and moving costs. Total closing costs are typically 3–4% of the purchase price.

How much are closing costs in Ontario?

In Ontario, closing costs typically range from $15,000 to $35,000+ depending on the purchase price. The biggest single cost is land transfer tax (e.g., ~$16,950 on a $700,000 home). First-time buyers get a provincial rebate of up to $4,000. Toronto buyers also pay municipal land transfer tax with an additional rebate of up to $4,475.

Do first-time buyers get a discount on closing costs in Canada?

Yes. First-time home buyers in Ontario receive a Land Transfer Tax rebate of up to $4,000. Toronto first-time buyers receive an additional municipal Land Transfer Tax rebate of up to $4,475. There is also a federal First-Time Home Buyers' Tax Credit worth $1,500. These rebates can significantly reduce closing costs.

What is CMHC mortgage insurance and when do I need it?

CMHC mortgage insurance is required when your down payment is less than 20% of the purchase price. The premium ranges from 2.8% to 4% of the mortgage amount, depending on your down payment percentage. It is added to your mortgage balance. The purpose is to protect the lender if you default — it does not protect you as the buyer.

Closing Costs in Canada: The Complete Guide

Closing costs are the fees and expenses paid on closing day — separate from your down payment. Most first-time buyers budget carefully for their down payment but don't realize closing costs can add another 3–4% of the purchase price.

On a $700,000 home, that's an extra $21,000–$28,000 you need to have available.

Land Transfer Tax

Most provinces charge a land transfer tax (LTT) when property ownership transfers. Ontario uses a tiered rate structure:

0.5% on the first $55,000
1.0% on $55,001–$250,000
1.5% on $250,001–$400,000
2.0% on $400,001–$2,000,000
2.5% on amounts over $2,000,000

First-time buyer rebate (Ontario): Up to $4,000 off the provincial LTT. The rebate covers the full LTT on homes priced up to approximately $368,000.

Toronto buyers: Pay an additional municipal LTT on top of the provincial amount. First-time buyers in Toronto get a rebate of up to $4,475 on the municipal portion.

Alberta and Saskatchewan have no land transfer tax.

Legal Fees

You are required to hire a real estate lawyer in Canada. Your lawyer will:

Review the Agreement of Purchase and Sale
Conduct a title search
Register the deed and mortgage
Handle the funds transfer on closing day

Typical cost: $800–$2,500 depending on complexity. Get 2–3 quotes from real estate lawyers in your area.

Title Insurance

Title insurance protects against issues with the property's ownership history — fraud, errors in public records, or zoning issues. Most lenders require it.

Typical cost: $200–$400. One-time premium, no annual renewal.

Home Inspection

A home inspection is not legally required but is strongly recommended for resale homes. A qualified inspector checks the structure, roof, foundation, electrical, plumbing, and HVAC systems.

Typical cost: $400–$700 depending on property size. This is a few hundred dollars that could save you from a $20,000 repair surprise.

CMHC Mortgage Insurance (if applicable)

If your down payment is less than 20% of the purchase price, you're required to purchase CMHC mortgage default insurance. The premium is added to your mortgage balance, but there's also a provincial sales tax (PST) component that must be paid at closing. In Ontario, PST is 8% of the CMHC premium — this cannot be added to your mortgage and must be paid in cash on closing day.

Property Tax Adjustment

Property taxes are often prepaid by the seller. You'll reimburse the seller for the portion of prepaid taxes from your closing date to year-end. This is calculated at closing and varies by date.

Other Costs to Budget For

Home insurance: Your lender requires proof of home insurance before releasing funds. First-year premiums: $1,000–$2,500/year.
Moving costs: Local move: $800–$1,500. Long distance: $3,000+.
Immediate repairs and appliances: Budget at least 0.5%–1% of the purchase price for the first year.

Use Our Calculator

Use our Closing Costs Calculator to get an itemized estimate for your specific purchase price, province, and situation.

Source: Ontario Ministry of Finance, CMHC, various Ontario real estate law firms. Updated January 2026.