Buying a home is exciting, but it also comes with expenses that go beyond your down payment. One of the biggest surprises for many buyers is the amount due on closing day. If you haven’t planned for these additional costs, they can put unnecessary pressure on your finances right before you get the keys.
So, how much are closing costs in Ontario? While every transaction is different, most buyers should budget approximately 1.5% to 4% of the home’s purchase price to cover legal fees, taxes, insurance, and other expenses associated with completing the purchase. Understanding these costs in advance makes it much easier to create a realistic budget and avoid last-minute surprises.
Whether you’re purchasing your first home, upgrading to a larger property, or investing in real estate, this guide explains the most common closing costs Ontario homebuyers should expect, what affects the total amount, and how to prepare for them.
What Are Closing Costs?
Closing costs are the collection of fees, taxes, and administrative expenses that must be paid before ownership of a property is officially transferred to you. They are separate from your down payment and mortgage amount and are generally paid on or shortly before your closing date.
These costs cover the legal work required to complete the transaction, government registration fees, lender requirements, inspections, and applicable taxes. Some expenses are mandatory for nearly every purchase, while others depend on factors such as the property’s location, whether it’s a resale or new construction, your down payment, and the lender’s requirements.
If you’re trying to estimate closing costs in Ontario, a good starting point is budgeting between 1.5% and 4% of the purchase price, although high-value homes, new builds, and Toronto properties may exceed that range.
How Much Are Closing Costs in Ontario?
There isn’t a single answer because every purchase is unique. Several factors determine your final costs, including:
- Purchase price
- Property location
- Whether you’re buying a resale home or new construction
- Type of property (house, condo, townhouse)
- Size of your down payment
- Whether you’re eligible for first-time home buyer rebates
For example, someone purchasing a $700,000 detached home outside Toronto will likely pay significantly less than someone purchasing a similarly priced condo within Toronto, where an additional municipal land transfer tax applies.
The easiest way to get a personalized estimate is by using a Closing Cost Calculator Ontario, which helps you estimate taxes and fees based on your purchase price and location before you make an offer.
The Main Closing Costs Every Ontario Buyer Should Budget For
Although every transaction is different, these are the expenses most buyers encounter.
Land Transfer Tax
For most buyers, land transfer tax is the single largest closing expense.
Ontario uses a progressive tax system, meaning different portions of the purchase price are taxed at different rates. As the home’s value increases, the total land transfer tax also increases.
If you’re buying a property within Toronto, you’ll pay both the provincial Land Transfer Tax and the City of Toronto Municipal Land Transfer Tax. This can nearly double one of your largest closing expenses.
The good news is that eligible first-time home buyers may qualify for provincial rebates and, if purchasing in Toronto, additional municipal rebates that can substantially reduce this cost.
Legal Fees and Disbursements
A real estate lawyer plays an essential role in completing your purchase.
Your lawyer will:
- Review your purchase agreement
- Conduct a title search
- Register the property and mortgage
- Transfer funds between parties
- Prepare closing documents
- Ensure ownership is legally transferred
Legal fees generally range from approximately $1,000 to $2,500, depending on the complexity of the transaction. Administrative expenses, known as disbursements, are typically added separately.
Title Insurance
Most mortgage lenders require title insurance before closing.
Title insurance helps protect against issues such as title fraud, undisclosed liens, survey errors, or ownership disputes that may arise after you purchase the property. Unlike many insurance products, this is usually a one-time payment made during closing.
Home Appraisal
Many lenders require an appraisal before approving your mortgage.
An appraisal confirms the property’s market value and ensures the lender isn’t financing more than the home’s fair value. Although some lenders cover this expense, buyers often pay between $300 and $600 themselves.
Working with an experienced mortgage broker in Ontario can help you compare lenders, since appraisal requirements and lender incentives can vary.
Home Inspection
While not legally required, a professional home inspection is one of the smartest investments a buyer can make.
A qualified inspector evaluates the home’s structure, roof, plumbing, electrical systems, heating, insulation, and other major components. Identifying issues before closing can save thousands of dollars in unexpected repairs or strengthen your negotiating position with the seller.
Property Tax Adjustments
If the seller has prepaid property taxes beyond your closing date, you’ll reimburse them for the portion covering your ownership period.
This adjustment appears on your Statement of Adjustments prepared before closing, so there are no surprises when funds are transferred.
Mortgage Default Insurance
If your down payment is less than 20%, Canadian law requires mortgage default insurance.
Although many buyers roll the premium into their mortgage, the provincial sales tax (PST) on that insurance cannot usually be financed and must be paid as part of your closing costs.
Additional Costs That Are Easy to Forget
Some expenses don’t apply to every buyer but are common enough that they should still be included in your budget.
These may include:
- Condo status certificate fees
- Property survey fees
- Utility connection or transfer charges
- Interest adjustments
- Moving expenses
- New home HST (where applicable)
- Non-Resident Speculation Tax (for applicable buyers)
While each individual expense may seem relatively small, together they can add several thousand dollars to your final bill.
How First-Time Home Buyers Can Reduce Closing Costs
Buying your first home comes with several government programs that may help reduce upfront expenses.
Eligible buyers may benefit from:
- Ontario Land Transfer Tax Refund
- Toronto Municipal Land Transfer Tax Rebate (if purchasing in Toronto)
- First Home Savings Account (FHSA)
- Home Buyers’ Plan (HBP), allowing qualifying RRSP withdrawals
These programs won’t eliminate every expense, but they can significantly lower the amount of cash required on closing day.
How to Estimate Closing Costs Before You Buy
One of the biggest mistakes buyers make is focusing only on their down payment.
Instead, calculate your full purchase budget before you begin house hunting. A reliable closing costs in Ontario calculator allows you to estimate taxes, legal fees, and other expected expenses based on your purchase price.
For the most accurate picture, combine an online calculator with personalized advice from a mortgage professional. Every lender structures costs differently, and some fees vary depending on the type of mortgage you choose.
If you’re ready to estimate closing costs in Ontario for your specific situation, using Dove Mortgages’ Closing Costs Calculator is an excellent place to start before making an offer.
When Are Closing Costs Paid?
Most closing costs are paid shortly before or on your closing date through your real estate lawyer.
However, a few expenses, such as your home inspection or appraisal, are often paid earlier, when those services are completed.
Your lawyer will provide a detailed Statement of Adjustments before closing that outlines exactly how much you’ll need to bring, allowing you to transfer the required funds in advance.
Plan Ahead for a Stress-Free Closing
Understanding the closing costs Ontario buyers face is one of the easiest ways to avoid financial surprises during the home-buying process. While costs vary depending on the property, lender, and location, budgeting between 1.5% and 4% of the purchase price is a practical guideline for most buyers.
Planning ahead, taking advantage of available rebates, and using a closing cost calculator in Ontario can help you make informed decisions before you commit to a purchase.
If you’re preparing to buy a home, refinance, or simply want expert guidance on what your total borrowing costs will look like, the team at Dove Mortgages can help. Apply online today to receive personalized mortgage advice, compare lending options from over 30 lenders, and move forward with confidence.
Frequently Asked Questions
How much are closing costs in Ontario on average?
Most home buyers should budget between 1.5% and 4% of the property’s purchase price. The exact amount depends on factors such as the home’s value, location, whether it’s a resale or new construction, and whether you qualify for first-time home buyer rebates. Using a closing cost calculator in Ontario can provide a more personalized estimate.
Are closing costs included in my mortgage?
Generally, no. Most closing costs Ontario buyers pay must be covered with your own funds on or before closing day. The exception is mortgage default insurance (CMHC insurance), which is often added to your mortgage, although the applicable provincial sales tax must usually be paid upfront.
How can I estimate closing costs in Ontario before making an offer?
The easiest way is to use a closing costs in Ontario calculator that factors in your purchase price and location. You should also speak with a mortgage broker, who can provide a more accurate estimate based on your financing, lender requirements, and property type.
Do first-time home buyers pay lower closing costs?
Eligible first-time buyers may qualify for rebates that reduce their overall costs, particularly the Ontario Land Transfer Tax Refund. Buyers purchasing in Toronto may also qualify for an additional municipal rebate, significantly lowering one of the largest closing expenses.
Are closing costs different for condos?
Yes. Condo buyers often pay many of the same fees as other buyers but may also need to cover a status certificate fee and, depending on the building, move-in or elevator booking fees. These additional expenses should be included when you estimate closing costs in Ontario.
