How Much Are Closing Costs on a Mortgage in Canada: A Complete Breakdown

When buying a home in Canada, the purchase price is only part of the financial picture. One of the most common questions from homebuyers is: how much are closing costs on a mortgage in Canada? The short answer is that you should budget roughly 1.5% to 5% of the property's purchase price. On a $500,000 home, that means somewhere between $7,500 and $25,000 out of pocket. The exact figure depends on the province, the type of property, and whether you are a first-time buyer.

What Closing Costs Typically Include

Closing costs are the fees and charges required to finalize your mortgage and transfer ownership of the property. The largest single item is usually the land transfer tax, which ranges from about 1% to 2% of the purchase price in most provinces. Ontario and British Columbia also apply additional municipal or provincial taxes in certain cities, while Alberta and Saskatchewan charge smaller registration fees instead. First-time buyers often qualify for rebates that reduce or eliminate this cost.

Beyond taxes, expect to pay for a home inspection ($400–$800), an appraisal fee ($300–$500), title insurance ($200–$400), and legal or notary fees ($1,000–$1,500). If your down payment is under 20%, you will also pay CMHC mortgage default insurance, which can add thousands to your total. Lenders may charge application or origination fees, and you should set aside funds for adjustments such as prepaid property taxes and utility bills.

How to Estimate Your Own Closing Costs

To answer "how much are closing costs on a mortgage in Canada" for your specific situation, start with the purchase price and calculate the land transfer tax for your province. Add the fixed fees listed above, then factor in any lender-specific charges disclosed in your mortgage commitment letter. Your lender is legally required to provide a Cost of Borrowing Disclosure that itemizes these amounts, so review it carefully before signing.

A simple rule of thumb: set aside 2% of the purchase price for a resale home and 4% for a new build, where GST/HST and development charges may apply. Keeping a cash buffer of an extra $2,000–$3,000 protects you against unexpected adjustments at closing.

Conclusion

So, how much are closing costs on a mortgage in Canada? Budget between 1.5% and 5% of your home's price, with land transfer tax as the biggest variable. Plan ahead, confirm rebates you qualify for, and get a detailed estimate from your lender and lawyer early in the process. Understanding these costs before you make an offer keeps your purchase smooth and your finances secure.

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