You’ve surely heard the term and probably have a vague idea of what exactly closing costs consist of. We’re going to give you a quick breakdown of what they are and about how much you should set aside for them.

When purchasing a home, the mortgage lender will usually require you to confirm you have available funds for whatever your down payment is, plus an additional 1.5% for closing costs. The reason for this is so they know you have these funds available and set aside for your purchase so that on the day of closings, your deal doesn’t fall apart because you are unable to come up with that money. But what exactly is included in the 1.5%. Well, first off, the 1.5% is just an approximate number used and is not an exact figure of what your costs will be. Here are some of the costs you should consider:

Legal fees

Anytime you are purchasing a home, you will require a real estate lawyer to close the transaction for you. They do things justice-law like a title search, title insurance, register the mortgage against the house, and create the transfer/deed and all the other incidentals that go with buying a home. The fees will vary depending on the lawyer, the firm, the purchase price and the scope of work involved. These fees can range APPROXIMATELY around $750-$1,000 plus disbursements. Again, this is an estimate and will vary based on the lawyer you use. Speak to your lawyer for an accurate quote.

Land Transfer Tax

There are two separate land transfer tax (LTT) charges. One is Provincial Land Transfer tax and the other it Toronto Land Transfer tax. The buyer of the property pays this tax. The rates are as follows:

Ontario LTT

0.5% on the amount up to $55,000

1% for values between $55,000 and $250,000

1.5% for values over $250,000 and

2% for values over $400,000 when the land has at least one but not more than 2 single family homes.

Toronto LTT

0.5% on the amount up to $55,000

1% for values between $55,000 and $400,000

2% on values over $400,000

If you are a first time home buyer, you are entitled to a rebate of up to a maximum of $2,000 on your land transfer tax. Make sure you tell this to your broker and lawyer if you are a first timer.

Professional Fees:

These are any fees associated with your mortgage. From appraisal costs, lender fees, broker fees, home inspections, etc. These again will vary based on the scope of work, type of mortgage and purchase price.

Moving CostsPay here

If you plan on using a moving company or renting vehicles to help you move, you should get a couple of quotes beforehand so you know what kind of costs you should expect.


This is a very basic breakdown of the closing costs you are likely to encounter when buying a home. When budgeting for your down payment before buying a home, be sure to include your closings costs so there are no surprises on closing. Make sure you speak to your broker and/or Realtor when starting the process so they can help you plan and budget.

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