DON’T FORGET THE CLOSING COSTS WHEN YOU PURCHASE A HOME
- johnathanmcquoid
- Jan 17
- 3 min read
When buying a home, most people focus only on the purchase price — but that’s just part of the total cost.
There are additional expenses called closing costs, and if you don’t plan for them, they can catch you off guard.
Here’s what you need to know 👇
💰 What are closing costs?
Closing costs are the one-time legal, administrative, and adjustment fees you must pay on the day your purchase closes.
They aren’t optional, and they vary depending on your location, the type of home, and whether it’s new construction or resale.
Most buyers should budget 1.5%–4% of the purchase price to cover these costs.
📝 Common closing costs you need to plan for:
• Legal Fees
• Title Insurance
• Home/Fire Insurance
• Adjustments (prepaid taxes, utilities, condo fees, etc.)
• Land Transfer Tax
• GST on new construction
• Interest adjustments
• Moving-related expenses
Let’s break them down…
1️⃣ Legal Fees
Your lawyer or notary handles all the legal paperwork, ensures the contract is correct, and registers your mortgage and title.
Legal fees typically range from $500–$2,500, depending on complexity, plus additional search and registration costs.
They also collect:
✔️ land transfer tax
✔️ title insurance costs
✔️ adjustments
✔️ courier + disbursements
All of this is paid on closing day.
2️⃣ Title Insurance
Most lenders require title insurance.
It protects you from:
✔️ title fraud
✔️ unknown liens
✔️ zoning issues
✔️ errors missed in title searches
Costs range from $150–$500 depending on purchase price.
3️⃣ Home/Fire Insurance
Lenders require home insurance to be active before closing.
Typically ranges from:
• $400+ per year for condos
• $1,000–$2,000+ per year for detached homes
Coverage must match at least the mortgage amount or rebuild value.
4️⃣ Adjustments
These are reimbursements paid to the seller for anything they prepaid on your behalf, such as:
✔️ property taxes
✔️ condo fees
✔️ utilities
If the seller paid for the full month and you move in mid-month, you owe them back the unused portion.
5️⃣ Land Transfer Tax (varies by province)
Each province sets its own rules.
In Ontario and some major cities, first-time buyers may qualify for rebates.
Your lawyer will calculate the exact amount for you prior to closing.
6️⃣ GST on New Construction
New homes are subject to GST.
Resale homes generally are not.
There are partial rebates on certain new builds depending on price and occupancy.
7️⃣ Interest Adjustment Costs
Depending on your closing date, the lender may collect interest upfront until your first scheduled mortgage payment.
This is normal and depends on when in the month your closing occurs.
8️⃣ Additional Out-of-Pocket Costs
Not officially “closing costs,” but still important to budget for:
✔️ moving truck / movers
✔️ furniture and appliances
✔️ window coverings
✔️ paint or repairs
✔️ lawn or snow equipment
✔️ cleaning supplies
These expenses add up quickly, so plan ahead.
💬 Final Thought
Closing costs can surprise buyers if they aren’t prepared — but with proper planning, they’re easy to manage.
If you want help estimating your total closing costs or reviewing your budget before you buy, message The Frontline Mortgage Group.
We’ll walk you through the numbers and make sure you’re fully prepared for your purchase. 💬