First-time home buyer? Do not forget the closing costs
Saving a down payment is hard enough — but buying your first home comes with a second pile of cash you need on closing day. Budget 1.5% to 4% of the purchase price for closing costs, and nothing on this list should surprise you.
The big-ticket items
- Land transfer tax. Charged by most provinces and some municipalities. On an $800,000 Ontario home it exceeds $12,000 — though first-time buyers receive rebates in Ontario, BC, and elsewhere.
- Legal fees. Your real estate lawyer reviews the purchase, registers the mortgage, and handles funds: typically $1,000 to $2,000 all-in.
- Title insurance. Often required by lenders, usually $200 to $400, protecting against title fraud and survey issues.
The medium-sized items
- Home inspection: $500 to $800 — money well spent, always.
- Appraisal: $300 to $500, sometimes covered by the lender.
- Prepaid property taxes and utilities: You reimburse the seller for any prepaid portions.
- Home insurance: Lenders require proof before closing; budget the first year’s premium.
The easy-to-forget extras
- Moving costs: anywhere from a rental truck to $3,000+ for professional movers
- Adjustments for condo fees or oil in the tank if applicable
- New furniture, appliances, or immediate repairs — even modest homes need something
Tip: Ask your lawyer for a statement of adjustments a week before closing. It itemizes every dollar due, so the final number is never a mystery.
The bottom line
On a $700,000 home, plan on $10,000 to $25,000 beyond your down payment. Build this into your savings target from day one — the worst time to discover closing costs is the week before closing day.
This article is for informational purposes only and does not constitute financial advice. Rates and product details change frequently — always compare current offers before making a decision.
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