There are real estate closing costs when purchasing a home in Ontario, and here is a summarization of what you should expect:
1. Purchase Price (from offer) less deposit.
2. Home inspection fee: Approx. $400.00 – $500.00 up to 3500 Sq ft. Multi unit or over 3,500 sq ft prices will vary.
3. Appraisal fee: (lender will arrange appraisal at your expense, approx. $250.00).
4. Legal fees for the purchase of a home: Usually about $1500.00 in all – comprising of $500-$700 for the basic fee, including title search, registration fees, plus disbursements, which are the photocopies, courier costs, etc that your lawyer incurs while processing your file. When selling, approximately $900.00 in all, with a base fee of $400-$600 plus disbursements (title search not required).
Many lawyers offer a better rate if you are both buying and selling a home and they both close on the same day.
5. HST: On the lawyer’s fee.
6. Registration costs: Purchasers must pay the province of Ontario a registration fee on each document registered on the title to the subject property. Cost to register a Deed is approximately $70.00 and cost to register a Mortgage is approximately $70.00.
7. Title Insurance: (always a good idea) approx. $250.00. Typically taken over for survey, however if you are planning on (installing) a fence, a survey will be needed.
8. Land Transfer Tax: Is the tax that must be paid to the Province of Ontario on registration of a Deed. The rate of tax is based on the price of the home purchased. The calculation is as follows:
• Under $250,000: Purchase price x 1% less $275.00
• Over $250,000: Purchase price x 1.5% less $1525.00
• Over $400,000: Purchase price x 2% less $3525.00
• Note: If you are a first-time home buyer in Ontario you are eligible for a refund of the land transfer tax up to $2,000.
9. Prepaid Expenses: (Utilities, gas, taxes, condo maintenance fees). These are expenses that the seller may have prepaid and which they get reimbursed for. This amount will be reflected in the statement of adjustments that you receive from your lawyer. Also utility transfers or “new” connection fees may apply.
10. Mortgage Insurance: (CMHC – Canadian Mortgage and Housing Corporation). When you need a loan that is more than 75% of the purchase price of the home, mortgage loan insurance is required to protect the lender. This allows you to buy a home for as little as 5% down payments, but adds to the monthly carrying cost. These fees can be prepaid, but are usually added to the mortgage loan amount.
11. HST on CMHC premium: There is sales tax on the CMHC premium amount.
12. CMHC application fee: It ranges from $75.00 to $235.00.
13. Interest adjustment: Monthly mortgage payments are due on the 1st of the month. Unless the closing date is the 1st, you must repay the amount of interest accruing up to the 1st day of the following month, which is the Interest Adjustment Date. For example if the closing date is March 15th but, the IAD is April 1st, interest from March 15th to the 31st must be paid.
These figures are to help you in budgeting for a new home-These numbers are an estimate only