Budgeting for a home involves more than the down payment and the monthly mortgage. Closing day comes with its own costs, and some expenses continue after you move in. Use this guide to understand what typically applies in Ontario and how Toronto buyers should prepare.
A quick rule of thumb
Plan for closing costs of about one and a half to four percent of the purchase price, not including your down payment. The exact number depends on your mortgage, property type, and location.
One time costs at offer or before closing
Deposit on the offer
Paid when your offer is accepted. It forms part of your down payment and shows the seller you are serious.
Home inspection
A professional inspection helps you understand condition and upcoming repairs. It is especially valuable for older GTA homes.
Appraisal
Your lender may order an appraisal to confirm value. Sometimes the lender pays. Often the buyer pays.
Status certificate for condos
If you are buying a condo, your lawyer will review the status certificate to assess the corporation’s financial health, rules, and any planned work. The certificate carries a small fee, usually around one hundred dollars.
Survey or title solution
Some lenders ask for an up to date survey or an equivalent title solution. In Ontario most buyers use title insurance arranged by the lawyer.
Legal and registration costs
Lawyer’s fees and disbursements
Your real estate lawyer handles the title search, reviews your Agreement of Purchase and Sale, prepares closing documents, and transfers funds. Disbursements include searches, couriers, and registration charges.
Title insurance
Common in Ontario and usually arranged through your lawyer. It protects against certain title issues and fraud that may not appear in traditional searches.
Land registration fees
Your deed and your mortgage are registered on title. Registration carries government fees set by the province.
Taxes and government charges
Ontario Land Transfer Tax
Charged on most purchases in the province. The amount is based on price bands.
Toronto Municipal Land Transfer Tax
If the property is in the City of Toronto, a second land transfer tax applies in addition to the provincial one.
First time buyer rebates
If you are an eligible first time buyer, you may qualify for provincial and Toronto rebates that reduce land transfer tax. Your lawyer will apply these on closing.
HST on new construction
HST applies to most new homes. Builders often include HST in the advertised price but your lawyer will confirm how it is handled in your contract. Rebate rules depend on end use, occupancy, and price caps.
Mortgage related costs
Mortgage default insurance premium
If your down payment is less than twenty percent, the premium for mortgage default insurance is added to your mortgage. In Ontario the provincial sales tax on that premium is paid on closing.
Interest adjustment
You may prepay interest from the closing date to the date your regular payments begin. Your lender will outline this in your disclosure.
Lender and broker fees
Some mortgages include setup or underwriting fees. Ask your lender for a full list early in the process.
Prorations and adjustments
Property tax adjustment
You will reimburse the seller for any prepaid property taxes, or receive a credit if taxes are in arrears.
Utilities and fuel
If the home uses oil or propane, the seller may charge for the remaining fuel. Water heater or HVAC rentals transfer at closing and continue as monthly charges unless you buy out the contract.
Insurance and protection
Home insurance
Your lender requires proof of insurance effective on closing. Confirm coverage for water, sewer backup, and overland flooding if they are relevant to the area.
Title insurance
Listed above under legal costs, but worth flagging again because most Ontario buyers rely on it rather than ordering a new survey.
Moving and immediate setup
Moving company or truck rental
Book early, especially at month end.
Locksmith and safety items
Plan to rekey locks and test smoke and carbon monoxide alarms on day one.
Utility connections and service fees
New accounts for electricity, gas, water, internet, and cable may include setup charges or deposits.
Cleaning and small repairs
Most buyers set aside a modest budget for paint, hardware, and minor fixes.
Situational or property specific costs
Condo monthly maintenance fees
These cover the corporation’s operating budget and contribution to the reserve fund. Factor in possible special assessments for major work.
New construction adjustments
Builders may charge items such as utility meters, Tarion enrollment, and development levy adjustments if they are not capped in your agreement. Review your Schedule of Adjustments with your lawyer.
Rural or special systems
Well and septic tests, water potability checks, and equipment service agreements may apply outside city services.
How to budget with confidence
Get a written pre approval so you understand your rate, payment, and maximum purchase price.
Ask your lender for a full list of expected charges including the interest adjustment and any lender fees.
Request a closing cost estimate from your lawyer based on your price range and location.
Add a small contingency for the unexpected so closing day is calm.
Have questions about closing costs or timing? Call (416) 347-3686 or send an e-mail and I will walk you through your next steps.
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