What Are The Closing Costs When Buying and Selling A Toronto House

The cost of buying or selling your home is not just based on the purchase price on the offer. If you are selling, you would want to get a snapshot of all the related closing fees to work out your net proceeds from the sale. If you are buying, you would want to budget and have funds put aside well before writing an offer. Below is a quick summary of the closing costs when buying and selling a Toronto house.



When you apply for a loan, home appraisals are used to protect the lender’s interest. Typically the lender won’t lend more than the home’s appraised value. When the lender orders the appraisal to process your final loan approval, the purchaser typically pays for the appraisal which can range from $200-$400.


Land Transfer Tax is specific to each province and is based on the percentage of the purchase price. First-time Buyers in Ontario can qualify for a rebate of up to $2,000 and in the City of Toronto up to $3,725 based on the cost of your home. You can get a quick estimate of the closing cost using the Ontario Land Transfer Tax Calculator here.


A Downpayment for a purchase can be as little as 5% of the purchase price based on the current lending guidelines.

When you obtain a pre-approval, make sure you verify with your mortgage broker.

- min 5% down up to $499,999 [subject to CHMC insurance premium as high ratio mortgage]

-min 10% down from $500,000 to $999,999 [subject to CHMC insurance premium as high ratio mortgage]

-min 20% down from $1,000,000.

-min 20% down for rental investment properties

CMHC premiums can range from as low as 0.5% to as high as 7.0% depending on the the size of the loan. This premium can be paid upfront at closing, or rolled over to the balance of your mortgage.

If you have 20% down for buying your principal residence, this insurance is not required. Speak to your lender or mortgage professional for clarifications. You can work out how much the CMHC insurance premium is from the CMHC website.


Legal fees can range anywhere from $800-$1,300 plus HST and disbursements depending on the complexity and value of the purchase. Don't hire a real estate lawyer based on the cheapest rate, but look for one that is responsive and will represent your best interest if issues or questions arise.


If you are buying a new home, most new construction in Ontario are covered by a new home warranty program. Should the Builder default or fail to build to an agreed-upon standard, the warranty fund will finishe or repair the deficiencies to a maximum amount. Tarion Warranty Enrolment Fee is calculated based on the purchase price. The calculation table can be found on http://www.tarion.com


The purchaser is required to have property fire insurance in place on closing day if you are applying for a loan. Your lawyer will also recommend that you get Title Insurance in case of defects of title to the property. The fee is a one time premium. Speak to your lawyer about the amount you should expect. More details on title insurance can be found here.


If you plan on having a mortgage for your purchase, the lender will want to see that you have a home insurance policy in place upon closing. Expect the cost to be $800 and up.


At closing of the transaction, adjustments are costs associated with what the Vendor has prepaid (ie. Prepaid property taxes, hot water tank monthly rental etc). At closing, your Lawyer will work out the adjustments, and provide the Buyer with a statement.



If you are selling and has a mortgage on your property, you will be subject to a mortgage discharge fee. The fee charged by each lender can vary. If you will be making pre-payments before the mortgage term matures, you could be subject to the a mortgage penalty. Ask your mortgage broker or your mortgagee for details before you list your property.


The legal fees for a property is again based on the selling price of the property. It can range from $800-$1500 plus HST and disbursements.


When you sell a home in Toronto, the typical commission is 5% of the selling price+HST for the services of the buying and selling brokerages. This cost will come from the proceeds of the sale at closing processed by your lawyer.


You will still have the final month utility bill to clear after closing. You should notify your utility company and arrange for the a meter reading on closing day.

Anne Lok is a Toronto Real Estate Broker with over 14 years of experience. She specializes in all aspect of residential real estate from modern houses, infill development, condos, lofts and rental properties in urban Toronto neighbourhoods. Anne aims to provide not only the best client service, but also a genuine authentic experience that will match your expectations. You can learn more about Anne at urburbia.ca or linkedin.

#sellmyhome #rentorbuyahome #homeselling #homebuy

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