Closing Costs Calculator
for Canadian
home buyers.

How closing costs work in Canada

Closing costs are the cash you need on closing day to actually take ownership, over and above your down payment. As a rule of thumb they run 1.5% to 4% of the purchase price, and the spread is wide because the single largest item — land transfer tax — is provincial and varies enormously by where you buy. A buyer in Toronto, who pays both a provincial and a municipal land transfer tax, lands near the top of that range, while a buyer in Calgary or Saskatoon, where there is no land transfer tax at all, often comes in well under 2%. Your real-estate lawyer collects everything by wire transfer a few days before closing and pays it out on your behalf, so the money has to be liquid and ready, not tied up in investments you still need to sell.

What the estimate is made of

• Land transfer tax — almost always the largest item; provincial plus municipal where it applies, such as Toronto.
• Legal / lawyer fees — $1,500–$2,500 including disbursements (a notary handles this in Quebec).
• Title insurance — a one-time $300–$500 policy that most lenders now require.
• Home inspection — $400–$700, optional but worth it on resale homes.
• Appraisal — $300–$500 when the lender does not cover it.
• PST on the mortgage insurance premium: due in cash in Ontario, Quebec and Saskatchewan (CMHC).
• Adjustments — reimbursing the seller for prepaid property tax and utilities.

A worked example: a $700,000 purchase in Ontario

Take a $700,000 resale home outside Toronto, bought with 10% down and a CMHC-insured mortgage. The Ontario land transfer tax on $700,000 is about $10,475 (Ontario rates), and because the home is outside the city there is no municipal layer. Legal fees and disbursements run roughly $1,800, title insurance about $400, a home inspection around $500, and an appraisal — if the lender does not absorb it — another $400. The CMHC premium on a $630,000 loan (3.10% at 90% loan-to-value, about $19,530) is financed into the mortgage, but the 8% Ontario PST on that premium, roughly $1,560, must be paid in cash. Add a few hundred dollars in property-tax and utility adjustments and the cash needed at closing comes to about $15,400, roughly 2.2% of the price, and entirely separate from the $70,000 down payment.

What is financed versus what is due in cash

The line that catches buyers off guard is the CMHC premium. The premium itself is added to your loan and spread over the amortization, so it never shows up as cash on closing day — but the provincial sales tax on that premium is not insurable and has to be paid up front in Ontario, Quebec and Saskatchewan. Everything else in the list above is cash too. On new construction, factor in HST or GST, which applies to newly built homes but not resale, though the new housing rebate offsets much of it for owner-occupiers. Alberta, Saskatchewan, and Newfoundland buyers can trim the whole estimate by a wide margin, since the absence of land transfer tax removes what is usually the biggest single cost.

Related scenarios

Because land transfer tax drives most of the variation, pin down your exact figure — and any first-time buyer rebate — in the land transfer tax calculator before you finalize a budget. And if you are putting less than 20% down, size the insured premium and the PST you will owe on it with the CMHC insurance calculator so nothing on the lawyer’s statement comes as a surprise.