Closing Costs in Ontario: A First-Time Home Buyer's Checklist

This article is general information, not legal or financial advice. Closing cost amounts vary by transaction and service provider. Get estimates from your lawyer and lender before finalizing your purchase.

The down payment is the number most first-time buyers plan around. Closing costs are the number that surprises them at closing. In Ontario, you can expect to spend 1.5–4% of the purchase price in closing costs — separate from your down payment — all due in cash at closing, with none of it rolled into the mortgage. On a $700,000 home, that is $10,500 to $28,000 you need to have ready beyond your down payment.

This checklist covers every significant closing cost for Ontario buyers, with notes on which ones are fixed, which vary, and which first-time buyers can reduce.

1. Land transfer tax (the largest variable cost)

Ontario charges a provincial land transfer tax on the purchase price of every home, calculated on a marginal bracket system. For a $700,000 home, the Ontario LTT is approximately $9,475 before any rebate.

Toronto buyers also pay a second, municipal land transfer tax (MLTT) of similar magnitude — Toronto's MLTT on a $700,000 home is approximately $9,975. Combined, Toronto buyers pay roughly $19,450 in land transfer tax at that price.

First-time buyer rebates:

• Ontario: up to $4,000 rebate on the provincial LTT (new and resale homes)
• Toronto: up to $4,475 additional rebate on the MLTT
• Combined maximum Toronto rebate: $8,475

Your lawyer applies the rebate at registration — you pay the net amount. The land transfer tax calculator shows the exact tax and rebate for your purchase.

For the LTT rebate to apply, you must never have owned a home anywhere in the world, be a Canadian citizen or permanent resident, and plan to occupy the home as your principal residence within 9 months.

2. Legal fees: $1,500–$3,000

A real estate lawyer is not optional in Ontario — every property purchase requires one. Your lawyer reviews title, handles the transfer of funds, registers the mortgage, and manages the exchange of keys.

Legal fees typically run $1,500–$3,000 including disbursements (the out-of-pocket expenses the lawyer incurs: couriers, registration fees, document preparation, and title searches). Ask for an estimate before you engage; most real estate lawyers will provide one. HST applies on legal fees.

3. Title insurance: $200–$500

Title insurance protects against title defects that may not appear in a title search — things like survey irregularities, encroachments, fraud, and prior liens that were missed. Most lenders require it; many buyers choose it even when not required.

A lender policy (covering the lender) typically costs $200–$400. An owner policy (protecting you) adds another $100–$200. Bundled, expect $250–$500. It is a one-time premium, not an annual one.

4. Home inspection: $400–$800

A home inspection is not legally required, but waiving it is a risk decision, not a cost-saving one. A qualified home inspector examines the structure, roof, electrical, plumbing, HVAC, and major systems, and produces a written report. Fees typically run $400–$600 for a standard home, more for larger properties or older homes.

The inspection happens before you remove conditions, not at closing — but budget for it as part of the transaction cost.

5. CMHC mortgage default insurance (if applicable) — and the Ontario PST

If your down payment is less than 20%, your mortgage must be insured by CMHC, Sagen, or Canada Guaranty. The insurance premium ranges from 2.40% to 4.00% of the mortgage amount, depending on your loan-to-value ratio. The premium itself is added to your mortgage — you do not pay it up front.

However, Ontario charges 8% PST on the CMHC insurance premium, and this PST is due at closing in cash. It is not rolled into the mortgage.

Example: $600,000 home, $60,000 down payment (10%), $540,000 mortgage. CMHC premium at 10% LTV = $540,000 × 3.10% = $16,740, added to the mortgage. Ontario PST on the premium = $16,740 × 8% = $1,339 in cash at closing.

Use the CMHC insurance calculator to calculate the premium and the Ontario PST on your specific purchase.

6. Property tax adjustment

At closing, your lawyer calculates the property tax the seller has already paid for the portion of the year you will own the home, and you reimburse the seller for that portion. If the seller is in arrears, the reverse applies. This adjustment can run from a few hundred dollars to a few thousand, depending on the municipality and where you close in the tax year.

7. Mortgage appraisal: $300–$600 (often waived)

Lenders sometimes order an appraisal to confirm the home's value supports the mortgage amount. Many lenders waive this for straightforward purchases or cover it as part of their application process. If the lender requires you to pay, expect $300–$600.

8. Home insurance: first year premium at closing

Lenders require a valid home insurance policy to be in place before they fund the mortgage. Your lawyer or mortgage broker will ask for proof of insurance before closing. While you do not typically pay the annual premium at closing, you will need a policy in force from day one — budget for your first year's premiums, typically $1,000–$2,500 depending on the home and location.

9. Utility hook-ups and adjustments

The seller may have prepaid hydro, gas, or water for a period that extends past closing, in which case you reimburse the prorated portion. These adjustments are usually small ($50–$300) and handled through the lawyer.

10. Moving costs

Movers are not technically a closing cost, but they are cash out the door on or around closing day. Local moves in Ontario typically run $1,000–$2,500 for a two-bedroom; larger moves or long distances are higher.

Total closing cost estimate for Ontario first-time buyers

| Cost | Low end | High end | Notes | |---|---|---|---| | Land transfer tax (net of rebate) | $0 | $20,000+ | Depends on price and location; $0 if rebate covers all | | Legal fees + disbursements | $1,500 | $3,000 | HST applies | | Title insurance | $200 | $500 | Lender + owner policy | | Home inspection | $400 | $800 | Pre-condition, not at closing | | CMHC PST (if applicable) | $0 | $2,500+ | 8% PST on premium; $0 if 20%+ down | | Property tax adjustment | $200 | $2,500 | Depends on timing | | Mortgage appraisal | $0 | $600 | Often waived | | Moving costs | $1,000 | $3,000+ | — | | Total (rough range) | $3,000 | $30,000+ | Wide range due to LTT |

For a first-time buyer in Toronto purchasing a $700,000 home with less than 20% down, a realistic total closing cost (including LTT net of the $8,475 combined rebate) might be in the $12,000–$18,000 range.

What to budget and when to confirm

1. When you start shopping: Budget 2–3% of your target purchase price for closing costs. Use the land transfer tax calculator to get a precise LTT estimate.
2. When you have an accepted offer: Get a legal fee estimate from your lawyer and confirm the property tax adjustment estimate. Request a final list of items from the lender.
3. About a week before closing: Your lawyer will provide a statement of adjustments showing every item and the net cash required to complete.

The closing cost cash must be in your account and accessible (not in the stock market or a 90-day GIC) by closing day. Many buyers discover this too late and scramble.

Frequently asked questions

How much are closing costs in Ontario?

Typically 1.5–4% of the purchase price. The largest variable is land transfer tax, which depends on the purchase price and whether you qualify for the first-time buyer rebate. Legal fees, title insurance, and the CMHC PST (if applicable) are the other significant items. The land transfer tax calculator covers the biggest line item.

What does a real estate lawyer cost in Ontario?

$1,500–$3,000 including disbursements is a typical range for a standard residential purchase. HST applies. Always get an estimate before you engage.

Do first-time buyers pay land transfer tax in Ontario?

They pay less, or nothing on lower-priced homes. The first-time buyer rebate offsets up to $4,000 of the Ontario provincial land transfer tax (and up to $4,475 more in Toronto). The rebate is applied at registration by your lawyer.

Do I have to pay CMHC insurance at closing?

Not the premium itself — it is added to the mortgage. But the 8% Ontario PST on the CMHC premium is due in cash at closing. For a $540,000 mortgage with a 3.10% premium, that's about $1,339 in PST at closing.

Can I roll closing costs into my mortgage?

Generally no. Closing costs are separate from the purchase price and must be paid in cash. The CMHC insurance premium is the exception — it is added to the mortgage (but the Ontario PST on the premium is not).