Closing Costs

Your mortgage isn't the only expense when buying a home. There are also closing costs that include appraisal fees, lawyer's fees, insurance and more.

Generally speaking, your combined closing costs represent between 3% and 4% of the purchase price. These will vary by province and city, and are often linked to the price of the home. Your lender, lawyer or notary and real estate agent can help you estimate them.

• High Ratio Mortgage application fee: Paid to the mortgage insurer to process your application if you're applying for a high-ratio mortgage (less than 20% down payment).

• Mortgage default insurance: High-ratio mortgages (those with less than 20% down payment) require insurance against default. The cost is usually added to the mortgage, and ranges from 1.00% to 3.25% depending on the amount of your down payment. There is an additional 0.25% premium for variable rate mortgages.

• Appraisal fee: The cost for a professional appraiser's opinion of the value of the property. Your mortgage lender will require an appraisal to determine whether the selling price is reasonable for that market.

• Land survey fee (or title insurance in lieu): The lender usually requires a recent survey of the property or title insurance in lieu.

• Home inspection fee: This covers the cost of a professional inspection of your home.

• Legal costs: Legal costs include fees for the professional services provided by your lawyer or notary, costs involved in conducting a title search, drafting the title deed and preparing the mortgage, as well as registration fees and other disbursements.

• Prepaid taxes, utility bills and other charges: The seller may have prepaid some bills before the closing date, which you will have to cover. All taxes, utility bills, and other charges incurred after the closing date become your responsibility.

• Provincial tax: Often referred to as the Land Transfer Tax, this tax is applicable in most provinces and is usually a percentage of the purchase price. Some provinces may also charge tax on new construction.

• GST: You pay GST on the purchase price of a newly constructed home.

• Fire insurance: Mortgage lenders want you to protect your home – and their mortgage collateral – against fire and weather-related damage so it's necessary to purchase fire insurance.

• Moving expenses: Costs will vary, depending on whether you do it yourself, rent a truck, or hire professional movers.

• Additional expenses: These could include utility hook-up charges, any repairs you need to make after buying your home, the cost of appliances and window and floor coverings.