Tools

Closing cost calculator

Last updated: June 10, 2022

What this tool is all about:

This tool lets you get an estimate of what your closing costs will be when you purchase a new property.

Disclaimer: Perch does not guarantee the accuracy of these results and should be treated as an estimate. Exact closing costs will be provided to you by your solicitor prior to your closing date. Please refer to our Terms of Use for more information.

When you decide to purchase a property, you will have to pay closing costs at the end of the buying process in addition to your down payment. These costs consist of various taxes and fees such as legal or administrative fees, leading up to the closing date of your home. A common mistake that many people make is overlooking the closing costs and are often left with a hefty fee they were not prepared for. Average closing costs will come up to 3-5 % of the purchase price of a home but this can vary. It’s a good idea to get an estimate of your costs before your closing date so that you don’t run into any difficulties later on as they have to be paid upon the closing of the home and often cannot be rolled into your mortgage.

For example, 3% in closing costs on a $300,000 home will be around $9,000 that you will have to pay upfront before you actually own the property.

These costs can include but are not limited to:

Land or property transfer taxes

Probably one of the largest closing costs for buyers, the land transfer tax is a one time fee paid to the provincial government when the home is transferred from the seller to you. If you live in Toronto, Montreal or Halifax, you will also have to pay a land transfer tax to the city. If you are a first-time home buyer, you might be able to claim a land transfer tax rebate against both your provincial and municipal land transfer taxes.

HST/GST 

If you are purchasing a resale home, you likely won’t need to worry about this expense. For a newly built home, the sale is subject to HST and you would need to confirm if the HST is included or in addition to the sale price you negotiate with the builder.

Title insurance

When a property is transferred from one owner to another, title insurance can provide protection against any financial losses resulting from fraudulent activities. It is an optional expense, but might save you from more fees and complications later on.

Legal fees

Buying a home is a very big decision that involves a lot of money, so it requires some legal guidance along the way. It is mandatory to have a real estate lawyer or notary to act for you in the purchase and mortgaging of your property, since only a lawyer can register a legal charge on the property which confirms your ownership. The legal fees will vary depending on the amount and difficulty of the work required.

Inspection fees

Home inspection fees are optional but highly recommended. It may be a good idea to get a home inspection as a condition of your Offer to Purchase. This will ensure that your new home is properly inspected for things such as water damage or structural integrity before moving in and could minimize costly repair fees down the line. It will be done by a home inspector and the price of this fee will depend on the complexity of the inspection and can range from $500 to $800 or more.

Appraisal fees

An appraisal will give you an unbiased estimate of your property’s market value and can vary depending on the home’s location, size and condition. The costs can range from $300 – $500 for a single family home and is typically requested by the lender. The buyer typically pays for the appraisal.

Interest adjustments

You pay interest on your mortgage after it’s been incurred, it is not a prepaid expense. If you have elected to pay semi-monthly or monthly, there will be gaps between your closing date and your payment dates. That gap is typically filled with an interest adjustment amount which is an interest-only payment and may be deducted at closing or paid by you when due (your lawyer would confirm).

For example, let’s say you opted for monthly payments on the 1st of each month and your closing was on January 10th. Here’s the schedule for your first few payments

  • Interest payment on February 1st for mortgage amount between Jan 10th and Jan 31st
  • Full mortgage payment (principal + interest) on March 1st  for mortgage amount between Feb 1st to Feb 28th.

After March 1st, you would then simply make your monthly payments now that your payment schedule is lined up on the 1st.

Statement adjustments

Some owners pre pay services such as utilities, property taxes and other bills. This means that you might have to pay the seller for the portion of the utilities they have paid where you will be owning the home. For example, if the seller paid for 4 months of property taxes and you were to move in 1 month later, you’d pay them ¾ of that property tax bill since you will be living in the property for the remaining 3 months.

When calculating your closing estimate, a closing cost calculator can help you get a fairly accurate estimate. You can estimate your costs by adding all of your insurance, taxes and other legal fees together, but keep in mind that the estimated closing costs for each buyer will vary depending on a few factors.

Closing costs are based on:

  • The property value
  • Whether you have a mortgage
  • The location of the property 
  • Whether you are a first time home buyer

The final calculation for closing costs will always be done by your lawyer.

Closing costs can’t be avoided, but there are a few options you can consider to minimize the cost:

  • Getting cashback with your mortgage:
    Most mortgage advisors (including Perch) offer their clients the ability to secure cashback in lieu of a lower rate. While the higher rate will result in higher mortgage payments, the upfront cash you get in return may be more important to you. We’ve seen cashback offers as high as 5.5% of the mortgage amount, which can fully cover closing costs.

    Depending on the cashback, it may be subject to clawbacks if you break your mortgage early so be sure to confirm the terms of the cashback.

  • Buying in a city that is outside of the municipal land transfer tax zone:
    The municipal land transfer taxes are only on properties within the city boundary line. So for example, if you bought a home in Scarborough instead of Toronto, you’d only pay one land transfer tax and still have access to the city.
  • Leverage your first-time home buyer rebates:
    You can only use the rebates on your first home, and the property must be your primary residence. Investment properties do not qualify for this type of rebate.
  • Leverage other grants/rebates available:
    For example, if you paid mortgage insurance on closing you could be eligible for rebates up to 25% of your mortgage insurance premium if you retrofit your home to meet greener, more environmentally-friendly standards.

As a first-time home buyer, there are many incentives and benefits that can help you save on certain costs. When it comes to closing costs, see below for some of the options you can consider:

First-Time Home Buyers Tax Credit (HBTC) 

You might be eligible for the First-Time Home Buyers Tax Credit (HBTC), which is a program offered by the Government of Canada to help first-time buyers with their closing costs when buying their first home. With this tax credit, you will be allowed to claim a maximum of $5,000 on your personal tax return, which can result in a maximum rebate of $750. You must apply for this tax credit in the same year you purchase your home.

You qualify for the HBTC if you:

  • You or your spouse or common law partner acquired a qualifying home
  • You did not live in another home owned by you or spouse or common law partner in the year of acquiring the home or 4 years prior.

If you are not a first time home buyer, you might qualify for the HBTC if you:

  • Are eligible for the disability tax credit
  • Are buying the home for the benefit of a person who is eligible for the disability tax credit and they are a relative.

Land Transfer Tax Rebate (LTTR)

In some provinces such as Ontario, British Columbia and Prince Edward Island, first-time home buyers are eligible to receive a rebate for their Land Transfer Tax. This tax is paid to the province or municipality by the buyer of a property. If you are a first time buyer, you might also be eligible for the Municipal Land Transfer Tax Rebate as well. Use our closing cost calculator to see if your location offers the LTTR and how much is available to you.

GST/HST New Housing Rebate (NHR)

You might qualify for a rebate for the provincial GST or federal HST when purchasing a newly built home. Be sure to check the details of your province’s rebate requirements when applying and ensure you apply within the specified time frame.

On closing day, here is what to expect as a buyer:

  1. You will need to sign a variety of documents that your lender will provide to your lawyer relating to your mortgage funds.
  1. You must provide your down payment (minus the deposit) and any other closing costs required. You can pay via a bank draft to finalize your purchase.
  1. Once all funds are confirmed, your lawyer will register your home purchase with the Land Title Office and the property will officially be under your name. You will then receive the deed and keys to your new home.

The terms of the purchase contract will have the details of the amount the buyer and seller must pay. In most cases, the buyer usually pays for most of these costs but the seller might need to pay for some costs at closing as well. The estimated closing costs for sellers usually include real estate commissions, which typically go to the seller’s agent and the buyer’s agent. Sometimes the seller will pay for a home inspection to ensure that buyers know the house is in good condition when shopping around.

Closing costs and your remaining down payment are typically summarized as one lump sum owing in a Statement of Adjustments. Once you know the amount owing, you’ll need to get a bank draft and provide it to your lawyer prior to the closing date.

A deposit has no minimum requirement, but it is usually at least 5% of the purchase price of the property and will count towards the required down payment when you make an Offer to Purchase. A deposit is usually paid within 24 hours of the seller accepting your offer.

The down payment is a buyer’s contribution to the total property purchase price and your mortgage payments will cover the remainder of the balance. You will need a minimum of 5% of the purchase price if the home is valued at $500,000 or less, 10% if the home value is more than $500,000  and 20% if the home is $1 million or more. Your down payment percentage will also affect your mortgage rate.

Purchase Price Minimum down payment required
$500,000 or less 5% of the purchase price
$500,000 to $999,999 5% of the first $500,000 of the purchase price


10% of any portion of the purchase price above $500,000
$1 million or more 20% of the purchase price
Each real estate lawyer or notary will have their own legal fees, which will depend on how complex the purchase transaction is and their experience. The fees will also depend on the type of home. There is the base fee based on the type of property and then the disbursement fees, which are the lawyer’s expenses incurred while working with you and can include things such as processing papers and faxing documents. You can discuss with your real estate lawyer on how you will pay them for their time, which will either be a flat fee or hourly rate.

Check out Perch’s Guide to Buying a Home at any step of your home buying process to get access to free tools and resources that will help you before and after your closing date. You can also sign up today for a Perch profile to connect with a real estate agent or mortgage advisor today.