Nice job! You scrimped and saved and, mercifully, you can now buy a home in Toronto. One very important item that some home buyers don’t know are the costs involved afterwards, a.k.a closing costs.
Don’t worry too much, the most common and important closing costs are broken down for you below:
Conditional Period Closing Costs: Before Closing Day
- Deposit: typically 5% of the purchase price is expected on offer acceptance and is paid within 24 hours of your offer being accepted by the seller
- Property Appraisal: $400- $600, often paid by the lender but sometimes, making millions in profit each year is too thin a margin so they may have you pay for it – looking at you Scotiabank…
- Home Inspection: $400-700, paid to the home inspection company the day before the home inspection
Closing Costs: On Closing Day
- Balance of Purchase Price: the price you paid for the home minus your initial deposit. Unless you have enough money to buy the house outright, this is your mortgage.
- Lawyer Fee (Legal Fees): The amount varies depending on purchase price and lawyer. Budget $1,200 to $1,700 to be sure.
- Title Insurance: sometimes is included in your legal fees, $250-$400.
- Mortgage Broker Commission: usually paid by the lender but you may have to pay if you are not using one of the major banks for your mortgage.
- Property Survey (if required) – $1,000-$2,500
- Ontario Land Transfer Tax: scales depending on the purchase price – use this Land Transfer Calculator
- Toronto Land Transfer Tax: double dip! Scales depending on the purchase price – use this Land Transfer Calculator
- Property Tax Adjustment: if the Seller prepaid property taxes beyond the closing date, you have to pay them back.
- HST: typically only applicable on new construction condos and houses
- Tarion Warranty Fees (warranty on new construction condos and houses only, not resale) – click here to estimate Tarion Fees
- Provincial Sales Tax: only applicable on chattels (appliances, pool table, furniture, etc.) bought outside of the offer.
- Adjustments for Utilities/Condo Fees: reimbursement to Seller for prepaid utilities like water/sewage/waste management which are paid quarterly.
- CMHC Insurance Premium: insurance premium charged if you have less then 20% down payment – click here to estimate CMHC insurance.
Closing Costs: After Closing Day
- Moving Expenses ($1,000+)
- Utility Connection Charges
- Redecorating and Renovating Costs
- Immediate Repair and Maintenance Costs