Last updated: September 2026
TL;DR:
Your down payment is not the only cheque you write when you buy a home in Ontario. Closing costs — things like land transfer tax, legal fees, title insurance, and property tax adjustments — are usually paid on closing day on top of your purchase price. Most buyers should budget about 1.5 to 4 percent of the purchase price for these costs. In Toronto, the municipal land transfer tax makes that bill higher than in the rest of Ontario. Knowing these costs before you shop protects your budget — and your approval.
Buying a home is exciting — until closing day brings a surprise. Beyond your down payment, you pay a long list of extra costs. If you did not budget for them, they can strain your savings or even delay your closing. Here is what closing costs include in Ontario, in plain terms.
What are closing costs?
Closing costs are the fees, taxes, and adjustments you pay when your home purchase is finalized. They are separate from your down payment. They cover everything needed to legally transfer the property from the seller to you.
Your real estate lawyer collects them on closing day, pays each party, and gives you a final statement.
How much should you budget? A common planning range is about 1.5 to 4 percent of the purchase price. For example, on a $700,000 purchase, that range would be roughly $10,500 to $28,000. That is only an example — your actual bill depends on your price, your city, and your situation. If you are buying in Toronto, expect to be near the higher end because of the extra municipal land transfer tax. Some lenders also want to see proof that you have this money set aside before they approve your mortgage.
One important note: if your down payment is less than 20 percent of the price, you may also pay mortgage default insurance on your monthly mortgage. That is a separate cost, not a closing cost, but it affects your budget too. You can estimate your monthly picture with the mortgage calculator.
What is Ontario land transfer tax, and why do Toronto buyers pay more?
Land transfer tax is a tax you pay to the province of Ontario every time property changes hands. It is usually the single largest closing cost. Every buyer pays it. It is calculated on the purchase price.
The short answer: Ontario charges a provincial land transfer tax on every purchase. Buyers in the City of Toronto pay a second, municipal land transfer tax on top of it. That makes Toronto closings noticeably more expensive.
First-time homebuyers in Ontario may qualify for a refund of part of this tax. That helps, but it rarely covers the full amount. Your lawyer applies for the refund as part of your closing.
For example, on a $700,000 purchase, a Toronto buyer pays the provincial tax plus a second municipal bill on top — roughly doubling the land transfer cost versus a buyer in Richmond Hill or Mississauga. Exact amounts change with the price, so ask your lawyer for your real number — and if you are buying in Toronto, budget extra room. (See our private mortgage Toronto page for city-specific financing notes.)
What do lawyers and title insurance cost at closing?
The short answer: You need a real estate lawyer to close a purchase in Ontario, and most buyers also buy title insurance. Both protect you from legal problems with the property. Their costs are part of your closing bill.
Your lawyer searches the title, reviews the agreement, registers your mortgage, calculates adjustments, and moves the money. Fees vary by firm and complexity — always get a written quote up front and confirm what is included, since some quotes leave out disbursements like title searches and registration fees.
Title insurance is a one-time policy you buy at closing. It protects you against problems like title defects, survey issues, or fraud that existed before you bought the home. Many lenders require it. Even when it is optional, most buyers choose it. It is a small cost compared to the risk of a hidden title problem.
For example, a legal bill might land in the low thousands, with title insurance adding a smaller amount on top — but quotes differ between firms, so get two or three in writing early.
What are “adjustments” on closing day?
The short answer: Adjustments split the seller’s prepaid bills fairly between you and the seller. Common ones are property taxes, utilities, and condo fees. You reimburse the seller for your share of the time you own the home.
The seller may have prepaid the year’s property tax, but you take ownership partway through — so you reimburse the seller for the months after your closing date. The same applies to prepaid utilities or condo fees.
These adjustments can run into the thousands of dollars, depending on the time of year and the property. A closing in January, right after annual tax bills are paid, looks different from a closing in December. Your lawyer calculates the exact split and shows it on your statement of adjustments.
Condo buyers: check for a status certificate review too — it reveals the building’s financial health and is worth every penny.
What other closing costs catch buyers off guard?
The short answer: Appraisal fees, home inspection fees, moving costs, and prepaid interest can add up. None of them are huge alone, but together they matter.
A home inspection happens before closing but is often forgotten in the budget. If your lender orders an appraisal, that fee may land on your statement, and some lenders collect a few days of prepaid interest to cover the gap before your first payment.
If you are buying new construction, there may be additional builder charges written into the agreement. Read that section carefully before you sign.
For buyers using alternative financing, it helps to understand the full picture before you commit. Our guide on private mortgages in Ontario explains how private lending works, and the Ontario private mortgage rules page covers the regulations that protect borrowers.
How can you prepare so closing day goes smoothly?
The short answer: Start early. Ask for written quotes, keep a closing-cost fund separate from your down payment, and review your lawyer’s statement before closing day.
A simple plan works well:
- Budget early. Set aside the 1.5 to 4 percent range when you start house hunting, not the week before closing.
- Get quotes in writing. Ask your lawyer for a full quote including disbursements. Ask about title insurance at the same time.
- Ask about the refund. If you are a first-time buyer, confirm your lawyer will claim the land transfer tax refund for you.
- Read your statement. Your lawyer sends a statement of adjustments before closing. Read it. Ask questions about any line you do not understand.
- Keep a buffer. Something almost always costs a little more than expected. A small buffer keeps closing day calm.
If you are already a homeowner, the same discipline applies when your term ends. Reviewing your costs ahead of time helps you compare options — see our page on mortgage renewals and refinancing.
Frequently asked questions
Do I pay closing costs on top of my down payment?
Yes. Closing costs are separate from your down payment and are paid on closing day, usually through your real estate lawyer.
How much are closing costs in Ontario?
A common planning range is about 1.5 to 4 percent of the purchase price. Toronto buyers should plan for the higher end because of the additional municipal land transfer tax.
Do first-time buyers get any relief on land transfer tax?
Ontario offers first-time homebuyers a refund of part of the provincial land transfer tax. Your lawyer applies for it during closing. It reduces the bill but usually does not remove it.
Are legal fees and title insurance mandatory?
You need a real estate lawyer to close a purchase in Ontario. Title insurance is required by many lenders and strongly recommended even when it is optional.
What are adjustments at closing?
Adjustments divide prepaid bills — like property taxes, utilities, and condo fees — fairly between the buyer and the seller based on the closing date.
Buying a home in Ontario means planning for more than the purchase price. If you want help understanding how closing costs fit into your mortgage approval — or you are exploring your financing options as a buyer in Ontario — get in touch.
Kia Pakravan, FSRA Licence #13380 — licensed in Ontario
Phone: (416) 716-9696
Address: 12930 Yonge Street, Richmond Hill, ON