Closing costs for first-time buyers in Ontario typically range from 1.5% to 4% of the purchase price, separate from your down payment. The largest single cost is land transfer tax, though first-time buyers receive provincial and municipal rebates. Knowing every cost category before your purchase date means no surprises at the closing table.
What No One Tells You Before Your Closing Day
You saved the down payment. You got pre-approved. You found the property and your offer was accepted. Then, two weeks before closing, your real estate lawyer sends you a statement of adjustments and there are costs on it you did not budget for. This situation plays out for first-time buyers across Ontario more often than it should.
Closing costs for first-time buyers in Ontario are real, predictable, and entirely avoidable as surprises. The buyers who show up to closing day with confidence are the ones who asked about every line item before they ever submitted an offer.
This guide walks through every closing cost category Ontario first-time buyers face, with real numbers for 2026. For a personalized estimate specific to your purchase price and location, book a free consultation with Sebastian Skibinski.
What Are Closing Costs When Buying a Home in Ontario?
Closing costs are the one-time expenses incurred in the process of legally transferring ownership of a property from the seller to the buyer. They are separate from your down payment and your ongoing mortgage payments. Closing costs are typically due on or before the closing date.
In Ontario, closing costs generally fall into three categories: government charges (primarily land transfer tax), professional service fees (legal, inspection, appraisal), and lender and insurance-related costs (CMHC PST, title insurance, mortgage registration). Understanding each category separately helps you budget accurately.
Land Transfer Tax: The Largest Closing Cost for Most Ontario Buyers
Land transfer tax (LTT) is levied by the Province of Ontario on the transfer of real property and is calculated as a percentage of the purchase price. It is payable by the buyer on closing day.
Ontario Land Transfer Tax Rates (2026)
| Purchase Price Range | Rate |
| First $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
First-Time Buyer Land Transfer Tax Rebate
Ontario first-time buyers receive a full rebate on provincial land transfer tax up to a maximum of $4,000. For properties priced up to approximately $368,000, this rebate fully offsets the tax. The rebate is applied through your real estate lawyer at the time of registration. Confirm with your lawyer that you qualify.
Toronto Municipal Land Transfer Tax
Buyers purchasing a property within the City of Toronto pay a second, separate land transfer tax at the municipal level. On a $650,000 Toronto condo, the combined provincial and municipal land transfer tax is $18,950 before any rebates are applied. Toronto first-time buyers receive a municipal rebate up to $4,475, combining with the provincial rebate for up to $8,475 in total rebates.
Legal Fees and Disbursements
A real estate lawyer is required to complete a property purchase in Ontario. Your lawyer handles the title search, registration of the deed and mortgage, review of the purchase agreement and closing documents, and the financial transfer on closing day.
- Legal fees (professional charge): $900 to $1,800 for a standard residential purchase
- Disbursements: $500 to $1,000 typically, covering title search, registration fees, and administrative expenses
- Total estimated legal cost: $1,500 to $2,500 for a standard resale purchase
Home Inspection Costs
A home inspection is a professional assessment of the property’s physical condition, covering the structure, foundation, roof, electrical systems, plumbing, and HVAC. While not legally mandatory in Ontario, it is strongly recommended for resale properties.
- Standard detached home inspection: $400 to $600
- Condo inspection: $300 to $450
- Additional specialty inspections: WETT, sewer scope, mould, or asbestos testing where warranted
Title Insurance
Title insurance protects both the lender and the buyer against losses arising from issues with the property’s title, including unknown liens, survey discrepancies, zoning violations, and fraud.
- Lender’s title insurance: $150 to $300, required by most mortgage lenders
- Owner’s title insurance: $200 to $400 one-time premium, strongly recommended
For more information on title insurance standards, visit the Financial Services Regulatory Authority of Ontario (FSRA) for consumer guidance on insurance and mortgage-related protections.
CMHC Mortgage Insurance PST: A Cash Cost Many Buyers Overlook
If your down payment is less than 20%, your mortgage requires CMHC mortgage default insurance. The insurance premium itself is added to your mortgage balance and does not require cash at closing. However, Ontario charges provincial sales tax (PST) at 8% on the CMHC premium, and this PST amount must be paid in cash on closing day. It cannot be added to your mortgage. Visit the CMHC mortgage insurance explained blog post for full details on how the premium is calculated.
Closing Adjustments: Prepaid Property Tax and Condo Fees
At closing, financial adjustments are made between buyer and seller to account for any prepaid costs. If the seller has paid property taxes or condo maintenance fees for a period that extends past the closing date, you reimburse the seller at closing for the proportional amount. This adjustment can range from a few hundred dollars to over a thousand depending on timing and the property’s annual costs.
How Much Should First-Time Buyers Budget for Closing Costs?
A practical closing cost budget for a first-time buyer in Ontario is 1.5% to 4% of the purchase price, above and beyond the down payment. The range is wide because land transfer tax varies significantly based on purchase price and location.
| Cost Item | $500K outside Toronto (10% down) | $700K in Toronto (10% down) |
| Land Transfer Tax (net) | ~$475 after $4,000 rebate | ~$15,275 after $8,475 rebates |
| Legal Fees | $1,800 | $2,000 |
| Inspection | $500 | $500 |
| Title Insurance | $500 | $550 |
| CMHC PST | ~$1,395 | ~$1,953 |
| Estimated Total | $5,170 to $6,500 | $20,878 to $23,000 |
These estimates are illustrative. Your actual closing costs depend on your exact purchase price, location, down payment amount, and lender requirements. Sebastian Skibinski provides every buyer with a detailed, customized closing cost estimate before they submit their mortgage application.
Budget Completely Before You Make Your Offer
Closing costs for first-time buyers in Ontario are predictable when you know the categories and the factors that drive each one. The buyers who arrive at closing without surprises are the ones who asked the right questions early, planned for every line item, and worked with professionals who kept them informed throughout the process.
Sebastian Skibinski, Mortgage Agent Level 1 operating under Miracle Financial (FSRA regulated), provides first-time buyers across Ontario with a full financial picture before they are committed to a purchase. With over 10 years of institutional and independent lending experience and access to 50+ lenders, Sebastian is the mortgage agent who stays with you from planning through closing and beyond. Learn more about Sebastian’s background and approach.
Frequently Asked Questions About Closing Costs for First-Time Buyers
1. Are closing costs paid in addition to the down payment in Ontario?
Yes. Closing costs are entirely separate from your down payment and must be paid from your own funds at or before closing. Your mortgage does not cover closing costs.
2. Can closing costs be rolled into my mortgage in Ontario?
Generally, no. Most closing costs cannot be added to your mortgage in Ontario. The CMHC insurance premium is an exception, as it is added to the insured mortgage balance. The PST on the CMHC premium, however, must be paid in cash. Some lenders offer specific products with closing cost assistance, but these are not standard and typically come with trade-offs in rate or terms.
3. Do I pay the full land transfer tax even as a first-time buyer in Ontario?
No. First-time buyers in Ontario receive a provincial land transfer tax rebate of up to $4,000. In Toronto, an additional municipal rebate of up to $4,475 applies.
4. When are closing costs due: before or on the closing date?
Most closing costs are due on the closing date. Your real estate lawyer will provide a statement of adjustments in advance showing every cost and credit. Some costs, such as the home inspection fee and the deposit on the purchase agreement, are paid earlier in the process.
5. What happens if I underestimate my closing costs in Ontario?
If you arrive at closing with insufficient funds, your lawyer cannot complete the transaction and the closing will fail. This can result in legal liability, loss of your deposit, and significant financial consequences. Sebastian Skibinski provides every buyer with a detailed closing cost estimate during the mortgage consultation, well before any offer is submitted.
6. Do I need home insurance before closing?
Yes. Most lenders require proof of home insurance before they release mortgage funds. Arrange your home insurance policy in advance of your closing date and have your insurance certificate ready to provide to your lawyer.
| Get a Personalized Closing Cost Estimate Before You Buy Call 647-831-7533 or book your free consultation FSRA Licensed. Operating under Miracle Financial. |
Key Takeaways
- Closing costs for first-time buyers in Ontario typically range from 1.5% to 4% of the purchase price, separate from and in addition to the down payment.
- Land transfer tax is usually the largest closing cost. First-time buyers receive a provincial rebate up to $4,000. Toronto buyers receive an additional municipal rebate up to $4,475.
- The CMHC insurance premium is added to your mortgage balance and does not require cash. However, the Ontario PST on the premium (8%) must be paid in cash at closing.
- Key closing costs include legal fees ($1,500 to $2,500), home inspection ($400 to $600), title insurance ($350 to $700), and closing adjustments.
- Home insurance must be in place before your lender releases mortgage funds. Arrange this before your closing date.
- Never underestimate closing costs. An incomplete budget can cause a closing to fail with serious financial and legal consequences.
- Sebastian Skibinski (647-831-7533), Mortgage Agent Level 1, FSRA licensed under Miracle Financial, provides every first-time buyer with a detailed closing cost estimate before any offer is submitted.
