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Closing costs are the one-time fees and disbursements a buyer pays when a real estate purchase legally completes, separate from the down payment — typically covering legal fees, title insurance, land transfer tax, and adjustments owed to the seller.
Closing costs cover everything a buyer pays on closing day beyond the purchase price itself: legal fees and disbursements, a title search or title insurance policy, land transfer tax, an appraisal fee if one is required, and any items credited between buyer and seller on the statement of adjustments.
The total varies by province, property type, and whether the mortgage is insured or uninsured — there is no single national figure, so a mortgage professional’s job is to help the borrower budget for their specific transaction rather than quote a rule of thumb. Some provinces also charge provincial sales tax on the mortgage default insurance premium, which is payable in cash at closing rather than added to the loan.
Legal representation: a real estate lawyer (or notary in Quebec) handles closing, registers title, and holds closing funds in trust until the transaction completes.
Insured-mortgage add-on: some provinces apply provincial sales tax to the mortgage default insurance premium from CMHC, Sagen, or Canada Guaranty, due in cash at closing rather than added to the loan.
Land transfer tax varies by location: most provinces charge it, Alberta and Saskatchewan charge title/registration fees instead, and Toronto adds its own municipal land transfer tax on top of Ontario’s — see Land Transfer Tax.
Brokers budget for it early: mortgage agents (Ontario, FSRA), submortgage brokers (BC, BCFSA), mortgage associates (Alberta, RECA), and courtiers hypothécaires (Quebec, AMF) flag likely closing costs during pre-approval so financing and cash-to-close are planned together.
A buyer purchasing a resale home budgets for these typical closing-cost line items (illustrative figures only):
$1,650 + $300 + $420 + $350 = $2,720. These figures are illustrative only; land transfer tax (see Land Transfer Tax) is additional and is often the single largest closing cost.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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