House Buying Closing Costs-Canada

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As a generalization, closing costs will be in the region of 1.5 to 3% of the purchase price of your home. The costs will very much depend on the property itself, the location (Province and City if you are in Toronto), your financial lender and the Lawyer that you use to close the deal.

  • Deposit
    • Usually considered to be a Non-refundable portion of the downpayment that you pay at the time you submit the Offer to Purchase [althought not strictly a closing cost, as it becomes part of the purchase price, it is a debit from your account]. However, clauses can be written into your offer that detail circumstances whereby the deposit paid is returned to you without interest or deduction. For example, your offer could (and probably should be) conditional on a home inspection, or obtaining financing. The deposit is credited against the balance of the purchase price on closing.
    • The size of deposit will vary according to the circumstances, location and also the current market conditions.

  • Lawyer : $600 - $1,000

  • Survey certificate : $250

  • Mortgage application fee : $300 - $500

  • Mortgage insurance
    • May be required by mortgage lender.
    • Usually required if downpayment is less than 20% of house purchase price.
    • If it's not required by mortgage lender, it is optional.
    • Most agree that it's an expensive form of insurance.
    • If mortgage insurance is not required by the mortgage lender and you want your mortgage to be covered in the event of your death, you might consider buying a term life insurance policy that would accomplish the same thing.
    • Mortgage insurance is available through Genworth Financial or CMHC

  • Building inspection fee : $250 - $500 depending on the size and location of property

  • Appraisal fee
    • Applicable if ordered by mortgage company.
    • $250 - $350

  • Property tax
    • Your pro rata share, split with the former owner.
    • Amount varies.

  • 5% GST
    • Payable only on newly constructed homes.
    • If the property is your primary residence, you may qualify for a rebate.
    • If the price is under $350,000, and it is your principal residence, the GST will be reduced to 64% of the GST otherwise payable on the purchase price.
    • If the price is over $350,000, the GST increases, until it reaches 5% for purchase prices over $450,000.

  • Strata fee
    • Applicable to condominiums.
    • Amount varies.

  • Prepaid utility bills
    • Your pro rata share if previous owner has filled oil tank for heating furnace or something of that nature.
    • Cost varies.

  • Service hook up fees
    • May be required by utility companies.
    • Cost varies.

  • Downpayment
    • That portion of the property price that you pay at the time that you take possession.
    • Typically varies from 5% to 20% of the purchase price and is the balance of the purchase price.
    • But you may make a larger downpayment if you wish.

Related Information

  • There are more articles about housing in the Housing and Mortgage sections of the BE Wiki.