Question 1

What are typical closing costs in Ontario?

Accepted Answer

For a typical Ontario home purchase, closing costs total 1.5–4% of the purchase price. This includes land transfer tax (the largest item), legal fees ($1,500–$2,500), title insurance ($250–$400), home inspection ($400–$600), property tax adjustment, and moving costs. In Toronto, the additional municipal land transfer tax adds significantly.

Question 2

Are closing costs included in my mortgage?

Accepted Answer

Generally no — closing costs must be paid in cash on or before closing day. The exception is CMHC insurance premium, which is added to your mortgage principal. Some lenders offer cash-back mortgages that can offset closing costs, but these typically come with a higher interest rate, so run the numbers carefully.

Question 3

What is title insurance and do I need it?

Accepted Answer

Title insurance protects you and your lender against losses from title defects, fraud, encroachments, or other title-related issues not found during a search. Most lenders require lender title insurance. Owner's title insurance is optional but highly recommended — it costs a one-time premium of $200–$400 and covers you for as long as you own the property.

Question 4

What is a property tax adjustment?

Accepted Answer

On closing day, the seller and buyer split the year's property taxes based on the closing date. If the seller has prepaid taxes beyond the closing date, you reimburse them for the remaining days. If taxes are paid in arrears, the seller credits you. Your lawyer handles this calculation automatically.

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