Closing costs can catch people off guard, especially first-time buyers. Whether you’re buying your first home or making a move after years in the same place, it helps to understand these costs well before closing day so there are no surprises when the final statement arrives.

Below is a practical breakdown of the most common buyer-side closing costs in Ontario, based on how transactions actually unfold.

Deposit

A deposit is one of the first expenses you’ll encounter after an offer is accepted. It’s not your full down payment. It’s an initial show of good faith that forms part of it.

• The deposit is typically due within one or two business days of acceptance

• Even conditional offers require a deposit

• If the deposit is not delivered on time, the agreement can become void

There’s no fixed deposit amount. Sellers request an amount, and it can often be negotiated. As a rough guideline, higher-priced homes usually come with larger deposits.

For example, on an $800,000 purchase, deposits commonly fall in the $20,000 to $40,000 range.

Deposits are held in the brokerage’s trust account and are only released in three scenarios:

• The transaction successfully closes, and the deposit is credited toward your purchase

• A mutual release is signed if conditions are not met

• A court order directs the release of funds, which is rare

If you submit a firm offer with no conditions, or if you remove your conditions, and later cannot (or choose not to) complete the purchase, the deposit may be forfeited and further legal action is possible.

Down Payment

The down payment is the largest upfront cost for most buyers.

Minimum down payment requirements in Canada are:

• Up to $500,000 purchase price: 5 percent

• $500,000 to $1,500,000: 5 percent on the first $500,000 and 10 percent on the remainder

• Over $1,500,000: 20 percent minimum

Down payments cannot be paid in cash. Lenders require a clear paper trail showing where the funds came from.

Key points to know:

• Down payments usually cannot be borrowed

• Gifted funds require a signed gift letter confirming they are not repayable

• RRSP funds may be used under the Home Buyers’ Plan if eligible

Mortgage Application and Lender Fees

If you qualify with a major bank or other A-lender, there is typically no mortgage application fee.

Fees become more common when:

• Credit history is limited or bruised

• Income is harder to verify

• A B-lender or private lender is required

In those cases, fees usually range from 1 to 2 percent of the mortgage amount. With private financing, fees are often built into the loan structure rather than paid upfront, as might be required with some B-lenders.

Whether this cost makes sense depends on the buyer’s situation and goals. For some, it’s a short-term bridge toward more traditional financing.

Mortgage Default Insurance (CMHC, Sagen, Canada Guaranty)

In Ontario, financial institutions such as TD, RBC, CIBC, etc., won’t lend over 80% of a home’s appraised value. Since many buyers don’t have a 20% down payment, they have to purchase mortgage insurance.

If your down payment is less than 20 percent, mortgage default insurance is required. This protects the lender, not the buyer, but it allows purchases with smaller down payments.

The insurance premium is added to your mortgage balance and paid over time. However, the provincial portion of the tax on that premium must be paid in full on closing.

Premiums vary based on down payment percentage and purchase price.

Land Transfer Tax (LTT) – Ontario

Land transfer tax is a provincial tax paid when you purchase real estate in Ontario. It’s due on closing and must be paid in full at that time. For many buyers, this is the single largest closing cost after the down payment.

The amount you pay is based on the purchase price and calculated in tiers.

Ontario Land Transfer Tax Rates

• First $55,000 at 0.5 percent

• $55,000.01 to $250,000 at 1 percent

• $250,000.01 to $400,000 at 1.5 percent

• $400,000.01 to $2,000,000 at 2 percent

• Over $2,000,000 at 2.5 percent

Example: $500,000 Purchase

Here’s how the tax is actually calculated:

• First $55,000 × 0.5% = $275

• $195,000 × 1% = $1,950

• $150,000 × 1.5% = $2,250

• $100,000 × 2% = $2,000

Total Ontario land transfer tax: $6,475

This amount must be paid on closing through your lawyer.

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First-Time Buyer Land Transfer Tax Rebate

Ontario offers a land transfer tax rebate of up to $4,000 for eligible first-time buyers.

To qualify:

• You must never have owned a home anywhere in the world

• The home must be your principal residence

• You must occupy the property within nine months of purchase

For a purchase of $368,333 or less, the rebate fully offsets the Ontario land transfer tax. Above that price, the rebate is capped at $4,000 and you pay the balance.

Using the $500,000 example above:

• Total LTT: $6,475

• First-time buyer rebate: $4,000

• Net land transfer tax payable: $2,475

Couples and Spouses

This is where things often get misunderstood.

• If both spouses are first-time buyers, you can access the full rebate

• If one spouse has owned a home before, but not during the marriage, you may qualify for 50 percent of the rebate

• If either spouse owned a home at any point during the marriage, no rebate is available

These rules apply even if only one person is on title.

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Important Notes

• Land transfer tax cannot be rolled into your mortgage

• It must be paid in certified funds on closing

• Municipal land transfer taxes are separate. Toronto buyers, for example, pay an additional city land transfer tax on top of the provincial one

Because this tax is unavoidable and payable upfront, it should be one of the first numbers you confirm when budgeting for a purchase.

Appraisal Fees

In most purchases, the lender will require an appraisal to confirm the home’s value. This is separate from a home inspection and is ordered for the bank’s benefit, not the buyer’s.

In many cases, the cost lands around $600, more for rural or complicated properties. Occasionally, a lender will waive the appraisal, usually when the deal fits neatly within their lending guidelines or when recent comparable sales are easy to find and they support the value. It’s nice when it happens, but it’s not something you should count on when budgeting.

Lawyer Fees and Disbursements

You’ll need a real estate lawyer to handle the closing, and their fees are another cost to plan for.

Most lawyers charge a base fee in the range of $1,500 to $2,000 plus HST. On top of that, there are disbursements. These are out-of-pocket costs the lawyer pays while completing the transaction, things like registrations, searches, and administrative expenses, which are then passed along to you.  

Some lawyers bundle everything into a flat fee, while others itemize disbursements separately. Either approach is fine, but it’s worth confirming what’s included before you commit so there are no surprises when the final statement arrives.

Shop around, not just for prices, but for referrals so that you know you’re hiring someone trustworthy.

Title Insurance.

Title insurance is typically arranged through your lawyer and paid as a one-time cost on closing.

While it’s not always legally required, it’s strongly recommended. Title insurance protects against issues that don’t always show up during a standard title search, such as unknown encroachments, certain title defects, and specific types of fraud.

The cost depends on the purchase price and the insurer, but it’s usually a few hundred dollars and provides long-term peace of mind.

Inspections – Home, Septic, Well, Pool, Etc.

Inspections are one of the most important ways buyers protect themselves, especially in older homes or rural properties.

Most buyers start with a general home inspection, which looks at the visible components of the house and flags potential concerns. Depending on the property, additional inspections may also make sense, such as septic or well testing for country homes, pool inspections, or sewer and service line inspections for older properties or homes with large trees.

Each inspection adds to your upfront costs, but skipping them to save money often leads to much bigger expenses later. We usually view inspections as a form of risk management, not just another box to check.

General Home Inspection: Typical Cost $500-$600. This is a visual inspection of the home’s key (visible) components. It will give you a detailed look at the overall condition of the house. A good inspector will flag any major concerns. Other inspections mentioned below are usually in addition to this inspection. Should the general inspection reveal concerns such as vermiculite insulation, mould, knob & tube wiring, foundation issues, or other findings that require specific professionals, there will be additional costs to investigate.

Septic Inspection (Rural Properties): Typical Cost $400-$500. The inspector will open the septic lid(s) and determine the condition of the septic tanks and leeching bed. Replacing a septic system can be very costly, so it is wise to have it inspected.

Well Inspection: Typical Cost $300-$550.  This is another critically important inspection if the property you’re purchasing has a well as the principal water source. The inspector will determine if there is adequate water flow to meet household needs.  (This is different from a simple municipal water test.)

Pool Inspection: Cost $250-450. Assuming an existing pool when purchasing a new home can be daunting. Expenses can easily add up if something such as the liner, pumps and equipment are damaged. We always add clauses to protect our clients the best we can, but it’s always best to inspect the pool if you’re buying in the warmer months.

Service Line inspection: Cost $200-300. This inspection is of the sewer line between the house and property line. It’s much more important to inspect older homes and homes that have large trees in the front yard. Over time, tree roots can grow around and through these lines, severely damaging them and causing sewage to back up into the home. The city of Hamilton provides coverage options for the service lines for $8.60per month or $103.20 annual fee. This is a must-have because replacing a sewer line can cost close to $10,000. If no coverage is possible in your area, it is wise to have it inspected by a professional before purchasing the home.

*There are other forms of due diligence that we have not mentioned in this article because we take care of them and there is no cost to you. These include:

• Zoning questions – Eg: Farm animal allowances, home businesses, auxiliary apartments, etc
• TSSA Requests – This will inform us if there are any buried oil tanks on the property.
• Legal Description Review – There are common “red flags” to look for. We dig up exactly what the issues are and let you know ahead of time if you need legal advice.

Realtor fees / Commissions

In most Ontario transactions, the seller pays the real estate commissions, which includes compensation for the buyer’s representative. As a result, buyers typically don’t pay their agent directly.

There are rare situations where a seller offers reduced or no buyer-side commission. If that comes up, it should be discussed clearly before moving forward so you understand any potential cost and can decide how to proceed.

Bridge Financing

Bridge financing can come into play when you’ve sold your current home and bought your next one, but the closing dates don’t line up perfectly.

Once your sale is firm, a bridge loan can temporarily cover the gap, allowing you to complete your purchase before the sale proceeds are released. It’s a useful tool and can make a move far less stressful, but it does come with costs that vary based on timing and loan structure.

This is one of those areas where a mortgage professional can walk you through the numbers and confirm whether it makes sense for your situation.

Average Cost of Movers (Local Ontario Move)

For a local move in Ontario, meaning within the same city or nearby communities, typical costs currently look like this:

• $1,200 to $2,500 for a condo or smaller home

• $2,000 to $4,000+ for a detached home, depending on size, stairs, packing needs, and timing

Most local moving companies charge hourly rates, usually in the range of $150 to $220 per hour for a two- or three-person crew, plus truck and fuel. Final cost depends on:

• Size of the home

• Number of stairs and access issues

• Distance between locations

• Time of month and season

• Whether packing or storage is required

Moves at the end of the month, especially during spring and summer, tend to land at the higher end of the range.

Word to the wise:  If you do hire a professional moving company, be sure to inquire about their insurance coverage and policies in case there are damages or unexpected delays on closing day.

Bringing it all Together

Buying a home involves so much more than just agreeing on a price. Closing costs are part of the reality, and while none of them are particularly mysterious on their own, they add up quickly if you’re not expecting them. Understanding what’s coming, when it’s due, and which costs are fixed versus flexible makes the entire process feel clearer.

The goal is to avoid last-minute stress, protect your cash flow, and make decisions with your eyes open.  Take some notes so that you don’t have to remember everything while you’re busy making big life decisions! 

If you’re planning a purchase, the smartest next step is to run real numbers early. That way, closing day won’t be a financial surprise and you can concentrate on the excitement of getting the keys to your new home.

 

Updated December 2025