Closing Costs
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Closing Costs: What You Need To Know 

12.07.2021 | Buying

When it comes to purchasing a new home, oftentimes buyers — especially first-time buyers — tend to focus on things like the overall sales price of their new home, how much their down payment will be, and what the structure of their mortgage will look like.

Although those are among the most important financial aspects new buyers need to focus on when completing a transaction, it’s also important to remember that they’ll need to fund a few closing costs that are integral to completing the deal too. And trust us, closing costs add up — to the point where they don’t seem so insignificant anymore.

Depending on what stage you’re at with your new home purchase, closing might seem a world away at the moment, but knowing about the costs involved will definitely benefit you moving forward.

That’s why we’ve put together our definitive guide to closing costs here, where we’ll cover what they are, who pays for them, and how much they might add up to be so that you can stay prepared, and get ready to close when the time finally does come around.

The Three Closing “Stages”

For clarity purposes, we like to group the various closing costs in three distinct stages. Stage One is prior to closing, Stage Two is during closing, and Stage Three is after closing.

Grouping it this way provides us with a more straightforward idea about how comprehensive closings costs are, when they’re owed, and how often they operate in each distinct phase.

Prior to Closing

Before the formal closing process on your new home even begins, there are three closing costs you need to know about as you will be expected to pay for them ahead of time. These include

  • Your Deposit — This is traditionally about 5% of your total purchase price.
  • A Property Appraisal – Your bank or private mortgage lender may pay for this, and will probably cost in the $400 – $500 range.
  • A Home Inspection – Fees for this can range between $400 – $700.

As the home buyer, it’s within your right to waive the condition in your Agreement of Purchase and Sale contract that requires the home to pass a home inspection before the deal is complete. Although this will save you from incurring any costs to fund the home inspection (and will be more favourable for the seller) we strongly recommend you don’t do this.

Receiving a home inspection of your new home from a qualified professional will offer you peace of mind that you aren’t investing in a property with any glaring issues or maintenance problems. If you only find out about these after you move into your new home, they could very well end up costing you much more than the home inspection fees to begin with.

Still on the hunt for that perfect new home? Have a browse through Our Listings page to see if anything currently up for sale piques your interest.

During Closing

During the closing process on your new home is when the vast majority of your closing costs will be incurred. The closing costs that will appear, without fail, include:

  • The Balance Of Your Purchase Price – This is paid by your bank or private mortgage lender, and the sum will later become the amount your mortgage is worth.
  • Legal Fees – These will vary wildly depending on the cost of your home, though you can expect to pay $500 at the very least for this.
  • Ontario Land Transfer Tax – This is the provincial government’s cost of transferring the Title of your new property into your name. The amount is dependent on the total purchase price of your home.
  • Toronto Land Transfer Tax – Separate from the Ontario Land Transfer Tax, you will also have to pay this municipal Title transfer fee if your new home is located within the city. The amount is also dependent on the total purchase price of your home.
  • Property Tax Adjustment – This is a reimbursement paid directly to the seller of your new home, which is based on the amount of property tax they have already paid the year you have purchased their home.

If you’re a first-time homebuyer, there’s a great chance you qualify to have both the fee of your Ontario Land Transfer Tax and your Toronto Land Transfer Tax reimbursed. To learn more about how, check out our post on What The Land Transfer Tax Means For First-Time Homebuyers here.

In addition to the firm closing costs above, these are some of the conditional closing costs you might also encounter during the closing period:

  • Title Insurance – A $250 – $400 fee that is sometimes included as part of your overall legal fees.
  • Mortgage Broker Commission – This is usually paid by the lender, if it’s applicable at all.
  • Property Survey – If commissioned by your lender, a professional property survey can cost about $1000 – $2000.
  • Harmonized Sales Tax (HST) – Only applicable to new construction houses and condos.
  • Tarion Warranty Fees – This is for the warranty on new construction condos and homes, not for resales.
  • Provincial Sales Tax (PST) – This is only applicable on any chattels included in the transaction that are purchased from the seller, and the cost will be entirely dependent on their valuation of them.
  • Adjustment for Utilities and Condo Fees – These are based on the amount the seller has previously paid. As this fee is a reimbursement akin to the previously mentioned property tax adjustment, it is dependent on the timing of your purchase.
  • A CMHC Insurance Premium – This fee is completely dependent on the total amount of your down payment. If your down payment amounts to less than 20% of the total purchase price of the home, then a premium is added to your monthly mortgage amounts for insurance purposes.

Whether you’re buying your first home or entering the market again for the first time in a while, get up to speed on what you need to know about buying a home in today’s market by reading our informative home buying guides below.


After Closing

Even though you’ll have finally finished the closing process on your new home, you’re not quite finished with paying closing costs just yet.

When someone typically asks us, ‘How much are closing costs?’, it really must encompass all three of these distinct stages. Closing isn’t simply about owning a property in name, which is where these final post-closing costs factor in. These include:

  • Moving – Depending on just how much you’re moving, how long it takes, and how many movers are required to move your things, this might cost you up to $1000.
  • Utility Set-Up – This completely varies but it’s important to consider what the costs of transferring things like your internet and cable TV to your new home will be.
  • Redecorating and Renovating – Chances are you have already accounted for any redecorating or renovations you’ll want to make in your home, but you should consider this a “closing cost” as well.
    Immediate Repairs and Maintenance – What needs to change immediately in your new home? If there are any necessary repairs you need to make once you move in, this should be accounted for too.

On that note, we like to define a closing cost as any fees you’ll need to put forward to ensure that your home is move-in ready when you finally receive the keys to your new home.


If you’re thinking about buying a condo, then it’s important to note there are some particular condo-specific details that you’ll need to consider before your purchase. Find out more about what you need to know about buying a condo here:


Final Answer: How much are closing costs?

Well, there might not be a definitive answer to this question. As you can see from our points above, closing costs can vary a lot depending on several different factors. This means it’s not only important to know about what various closing costs include, but that it’s most optimal to work with a team who can help you navigate them.

Purchasing a home is a big undertaking, and can feel even more daunting the first time around. As always, our advice is to seek the help of a real estate team with expertise working with homebuyers of all experience levels to help you navigate this often tricky and complex path to becoming a homeowner.


At Christensen Real Estate Group, we love working with first-time homebuyers and have a rich history of helping our clients buy their first homes with us. Find out more about the advantages we offer to first-time homebuyers (along with all of our clients) and what some of them have had to say about working with us previously here:


For 30 years, our clients have trusted us to minimize risk, offer unbiased opinions and ensure their best interests are served. We can do the same for you. Contact us today to talk about your buying needs. Contact us at  niels@christensengroup.ca or call at 416-441-2888.

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