Closing Costs
Quick Definition
Fees and expenses paid at the completion of a real estate transaction, typically 1.5–4% of purchase price.
Full Explanation
Closing costs are the fees and expenses (beyond the down payment) paid when finalizing a real estate purchase in Canada. They typically range from 1.5% to 4% of the purchase price. Common closing costs include: Land Transfer Tax, legal/notary fees ($1,500–$2,500), title insurance ($150–$400), home inspection ($400–$600), property tax adjustment, CMHC insurance premium (if applicable), moving costs, and appraisal fees. On a $500,000 home, plan for $7,500–$20,000 in closing costs on top of the down payment. First-time buyers may qualify for various rebates.
Related Terms
Land Transfer Tax (LTT)
A provincial tax paid when purchasing real property, calculated as a percentage of purchase price.
CMHC (Canada Mortgage and Housing Corporation)
Federal Crown corporation that provides mortgage default insurance for high-ratio mortgages.
Down Payment
The upfront cash you pay toward a home purchase, expressed as a percentage of purchase price.
Title Insurance
Insurance protecting against defects in a property's title or ownership history.
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