Closing Costs

Closing Costs

Property valuation fee

Approximate Cost: $150 – $200
This is the fee for determining the property lending value for mortgage purposes. This value may or may not be the same as the purchase price of the home.

Home inspection fees

Approximate Cost: $500
(may not apply if you are purchasing a new home)
The home inspector evaluates the structures and systems that make up your home and provides you with a written report. While not mandatory, many people make a professional home inspection a condition of their Offer to Purchase.

Property survey

Approximate Cost: $750 – $1,000
A survey indicates the boundaries and measurements of the land and positions of major structures, and any registered or visible easements (such as a driveway) or encroachments (such as a neighbour’s fence) on the property.

Title insurance

Approximate Cost: $250
Title insurance is optional and covers problems that may arise due to encroachment issues (for example, a structure on your property is actually part of your neighbour’s property and needs to be removed), existing liens against the property’s title, title fraud, undischarged mortgages and other issues relating to the property’s previous owners.

Land transfer tax

Varies based on city
This is charged whenever a property changes hands and is based on the purchase price. Most provinces in Canada charge a provincial land transfer tax and some cities also charge an additional municipal land transfer tax. In some cases, first time home buyers may be exempt from a portion of this cost. You can obtain further details about land transfer tax on provincial or municipal websites to help you estimate the cost.

The land transfer tax rate is the same for residents and non-residents of Canada.

Ontario Land Transfer tax rates
The tax rates calculated on the value of the consideration are:

0.5% up to and including $55,000

1% above $55,000 up to and including $250,000

1.5% above $250,000

2% above $400,000 where the land contains one or two single family residences.

Toronto Land Transfer tax rates
The tax rates calculated on the value of the consideration are:

0.5% up to and including $55,000

1% above $55,000 up to and including $400,000

2% above $400,000 where the land contains one or two single family residences.

As an example, if you are thinking about purchasing a home in Toronto, Ontario for $300,000, the provincial land transfer tax is $2,975 and the municipal land transfer tax is $2,725 for a total cost of $5,700.

Legal fees and related expenses

Approximate Cost: $1,300 – $2,500
These fees vary by province and are subject to GST or HST where applicable. Ensure your lawyer’s quote includes all related expenses and disbursements, not just legal fees. Make sure your interests are protected by discussing your Offer to Purchase with your lawyer or notary prior to signing.

HST

13% of purchase price
Generally, HST where applicable is charged on new homes, but not on resale properties. Always ask before signing an Offer.

Insurance costs for high-ratio mortgages

Variable
Usually, mortgage default insurance premiums range between 0.5% and 2.75% of the principal plus applicable fees (may be subject to provincial sales tax which cannot be added to mortgage amount).

If your down payment is less than 20% of the purchase price of your home, you must pay a one-time insurance premium on your mortgage amount. You can make arrangements to pay the premium to CIBC before closing, or it can be added to the principal amount of your mortgage. If it is added to the principal amount of your mortgage, you will pay interest on it at the same interest rate you pay on the principal amount of your mortgage.

Interest adjustments

Approximate Cost: $100 – $1,000
You will need to pay interest on any gap between the closing date of the purchase and the first payment date of the mortgage. You can avoid an interest adjustment by arranging to make your first mortgage payment exactly one payment period after your closing date.

Prepaid property tax and utility adjustments

Approximate Cost: $400 – $500
You will be required to reimburse the vendor for any prepaid property taxes or utility bills.

Home insurance

$450/year
Protection for your home and contents.

Mortgage life insurance

Variable
Costs vary but can be conveniently included in your regular mortgage payment.
Mortgage life insurance is optional and provides peace of mind. It protects your family financial security by paying off all or a portion of your mortgage (up to a maximum of $500,000) in the event of the premature death of you or your spouse.