The excitement of having a down payment saved is often tempered by a pervasive question: “Besides the down payment, how much are closing costs?” These final expenses—which are mandatory fees due at the conclusion of the real estate transaction—are the last hurdle before you get the keys. A precise mortgage closing cost calculator is your indispensable budgeting tool, providing a clear, itemized forecast of every dollar required on closing day. You should check Mortgage Recast Calculator.

Closing costs: what are they?

If you’re unprepared, closing costs can quickly add up, burdening your finances significantly. First-time buyers often overlook their closing costs, which are an essential part of the homebuying process. If you decide to purchase, you should take into account these costs; they will typically add up to 3% to 4% of the purchase price.

• Tax on land transfers
• Fees associated with legal representation
• Cost of a home inspection
• An assessment of the property
• The CMHC insurance program
• Expenses associated with appraisals

Depending on your location and circumstances, closing costs can be difficult to estimate. Below, we’ll outline the different types of closing costs and provide a rough estimate of their cost.

How to Use Mortgage Closing Cost Calculator: The Formula and Example

While the complexity of fees prevents a single, universal formula like in the general solution calculator, the core calculation is simply an addition problem:

Total Cash Needed = Down Payment + Lender Fees + Title Fees + Prepaid Escrows

Example Scenario: Calculating Total Cost

Let’s analyze a scenario for a home with a $400,000 price and a 10% down payment (a 20% of 400000 scenario would be $80,000, but we use 10% here to show fees).

1. Down Payment (10%): $40,000
2. Loan Amount: $360,000
3. Lender/Title/Govt Fees (Estimated 2% of Loan): $7,200
4. Escrow Prepaids (6 months of Tax/Insurance): $3,000

Total Closing Costs=$7,200+$3,000=$10,200

Total Cash Needed to Close=$40,000(DP)+$10,200(CC)=$50,200

This house cost calculator approach provides a realistic total. Without a specific tool, manually estimating the average closing costs range (typically 2% to 5% of the loan amount) is the best alternative, but using our closing cost calculator offers precision that flat percentages cannot match.

Closing costs most commonly encountered

The biggest component of closing costs are often land transfer taxes and legal fees. Land transfer taxes can exceed thousands of dollars, depending on the value and location of your property. The rest of the closing costs are likely to be much smaller, but they may still add up. We recommend budgeting for them when planning your new home purchase.

Tax on land transfers

Buying a property requires you to pay a land transfer tax to the provincial government and, in some cases, to the municipality. There is a significant variation between provinces in the amount of land transfer tax; however, budgeting for at least 1-2% is a good idea. The tax rate on land transfers may vary by province, with some having marginal rates that increase with purchase price, while others may have flat rates.

The provincial governments of Ontario, PEI, and BC offer land transfer tax rebates to homebuyers who are buying their first home. An $8,475 rebate is available to first-time buyers in Toronto for a $500,000 home that has a land transfer tax of $12,950.

Fees for lawyers and legal services

For a home purchase and mortgage to be successful, you will need to hire a real estate lawyer. In certain provinces, such as Ontario and Alberta, this is mandatory. Depending on the amount and difficulty of work, legal fees can range from $1,100 to $1,800.

Costs associated with other types of closings

Many of the below closing costs are also common in Canada. Some are already covered by your lawyer, for instance, if your seller provides an up-to-date property survey. Be prepared to pay if they aren’t already included.

An assessment of the property

A property survey certificate is usually required by mortgage lenders and real estate lawyers when purchasing a home, primarily to confirm the boundaries of the property. The seller may be required to provide a new property survey if the existing one does not reflect recent additions or improvements, such as a new garage, fence, or extension. Surveys are conducted by licensed land surveyors, and their cost varies depending on factors such as location, type, and property size, as well as any legal or geographical complications. A property survey in Canada typically costs between $1,500 and $6,000.

Fees for home inspections

It is highly recommended that you make your purchase offer conditional upon a home inspection by a professional. A home inspection will reveal hidden problems in the home that could have future consequences or be expensive to repair. When buying a freehold property, you will be responsible for all future property costs, unlike when buying a condo or apartment. Inspecting a house before signing the contract can save you thousands if not more in repairs than discovering problems afterward. In some cases, you may be able to negotiate a credit or discount to the original agreed-upon sale price, or even cancel the contract.

Fees for property appraisals

In general, mortgage lenders require a property appraisal from a professional appraiser in order to verify the home’s market value and determine how much they are willing to lend. In most cases, the lender arranges the appraisal themselves and will pay for it. The cost typically ranges from $300 to $600. If you wish to waive this fee, you should always contact the lender and ask if they will do so as they often waive it for new customers. Your real estate agent can also help you with a comparative market analysis (CMA).

Insurance for title

When you purchase title insurance, you are confirming that you own a property and its land legally. Title insurance is often required by lenders to protect against issues such as encroachments, property disputes, and errors in public records. The cost of title insurance varies depending on the insurance company and the property’s value. Most buyers pay between $200 and $500 as a title insurance premium.

Fees for government registration

Depending on the document, property type, region, and province, your lawyer will have to pay registration fees when filing official documents on your behalf with various government departments. It is possible that your lawyer will include these costs in their overall fee or will provide you with a list of these additional costs when you hire them. The average total for all registration fees is usually around $200 but you should speak with your lawyer for a more accurate estimate.

Fee for Estoppel Certificates

In order to buy a condominium or condo townhome, you will need an estoppel certificate. The estoppel certificate outlines all the common fees associated with your unit as well as the services you will receive. In addition, it details penalties for any violations of condo rules, unpaid fees, or pending litigation. The condo board or management may issue an estoppel certificate if there is any dispute regarding the conditions outlined above. The certificate typically costs around $100 and can be obtained from the condo’s management.

Buying Closing Costs Specific to Some Buyers

Mortgage insurance provided by CMHC

If you intend to purchase a home with a down payment of less than 20%, you are required to purchase CMHC insurance. You can also purchase mortgage default insurance from Sagen or Canada Guaranty. In this closing cost calculator, only the sales tax portion of your insurance premium is considered a closing cost. You can add the insurance premium itself to the balance of your mortgage.

Your CMHC mortgage insurance closing cost will depend on your location, the amount you’re borrowing, and how much you’re putting down. CMHC insurance premiums can reach thousands of dollars. 

Manitoba, Quebec, Ontario, and Saskatchewan residents must pay a provincial sales tax on their CMHC premium according to their HST/PST/GST rates.

The mortgage default insurance won’t be part of your closing costs if you make a 20% or more down payment.

NSRT (Non-Resident Speculation Tax)

Depending on where you live, a Non-Resident Speculation Tax may apply if you’re not a Canadian citizen or permanent resident. This tax usually applies in Ontario and British Columbia. Further, since 2023, Canada’s Prohibition on the Purchase of Residential Property by Non-Canadians Act has prohibited foreign nationals from purchasing residential property in Canada.

If you purchase a home in Ontario and are not a citizen or permanent resident, then you must pay the NRST, which is equal to 25% of the property’s value. When you stay in Canada for four years after purchase, either become a permanent resident, enroll full-time in an international program for two years after purchase, or work as a foreign national for one year after purchase, you can receive a full refund of the NRST.

In British Columbia, a foreign buyer’s tax of 20% applies to foreign nationals, foreign corporations, and taxable trustees. There are some areas in BC where the PPT tax is not required, but in some cases it is only 15%.

• District of the Capital
• Regional District of Fraser Valley
• Metropolitan Vancouver Regional District
• Located in the Central Okanagan region
• Located in Nanaimo, BC

This additional tax does not apply to foreign nationals who hold work permits from the BC Provincial Nominee Program.

The GST/HST on new construction

A sales tax will be charged on top of the purchase price of newly constructed or heavily renovated housing. This sales tax includes a federal portion and a provincial portion. There are some provinces that keep them separate while others combine them as the Harmonized Sales Tax (HST). In new constructions, GST/HST is almost always applicable, but the home buyer may not be responsible for the cost if the builder covers it. If you are uncertain, contact your seller or lawyer.

Depending on where you live, you may be eligible for the GST/HST New Housing Rebate. This allows you to recover some of the federal portion of the tax (GST) as well as the provincial portion (in select provinces). It is possible to apply for a rebate if you own a house that was built by you, or if you bought a house from a builder. Your lawyer can inform you of the full eligibility requirements.

Amounts of interest adjusted

When you close your purchase, you may be required to pay an interest adjustment. For example, your lender advances your mortgage to the selling party on August 2nd. However, you do not have to pay your first mortgage payment until August 15th. Interest accumulates from August 2nd to August 15th. Your lender will calculate the interest adjustment based on the interest accrued over those 13 days. For more information, contact your lender. Your mortgage payment will depend on the terms of your mortgage, the length of time before your first payment, and your mortgage rate.

Tax adjustments for real estate

It is likely that the previous owner of a resale home has already paid property taxes for the year. You may need to reimburse a portion of this tax. Using the WOWA Property Tax Calculator , you can calculate the house’s property tax. For specific details, please contact your lawyer. Utility expenses, for example, could be adjusted if the previous homeowner had paid for them in advance.

Considerations for other costs

In order to avoid unexpected expenses when buying a home, you should budget for certain costs that aren’t included in the closing costs. These include:

• Costs associated with moving,
• Furniture or appliance expenses,
• The cost of home insurance,
• Establishing utilities (such as electricity, internet, etc. ),
• Maintaining and repairing,
• A condo fee or HOA fee (if applicable).