The Closing Costs First-Time Buyers Always Forget to Budget For
First-time buyers spend months saving a down payment and then get blindsided on closing day by a second set of costs nobody warned them about. The good news is these are predictable, and in Ontario there are real rebates that soften the hit. Here’s what to budget for.
Land transfer tax (the big one)
Ontario charges a land transfer tax on every purchase, and if the home is in the City of Toronto, you pay a second municipal land transfer tax on top. That’s why Toronto buyers feel this most. The saving grace: first-time buyers get a provincial rebate of up to $4,000, and Toronto buyers get an additional municipal rebate of up to $4,475.
Legal fees and disbursements
Your lawyer handles the title transfer, registration, and the funds on closing. Budget roughly $1,500 to $2,500 for legal fees and disbursements, depending on the complexity of the deal.
Title insurance and the appraisal
Title insurance is a small one-time cost that protects you and your lender against title issues. An appraisal may also be required so the lender can confirm the property’s value. Neither is large on its own, but they add up.
The quick math
A good rule of thumb is to set aside 1.5% to 4% of the purchase price for closing costs, over and above your down payment. The exact number depends on where you buy and whether the Toronto land transfer tax applies. Knowing your real all-in number before you shop means closing day is a celebration, not a scramble.
Want a real closing-cost estimate?
Tell me the price range you’re shopping and I’ll give you a true all-in number, including the rebates you qualify for. No surprises on closing day.
Tyler Salmon, Mortgage Agent Level 2 (Licence #M21003803) · Tango Ontario (FSRA #13691)
