Mortgage & Closing Costs Guide

The price of the home is only one number. To buy it you also need your down payment, a mortgage you can carry, and enough cash for the costs that arrive on closing day. This guide explains what each of them is, so none of it surprises you.

1. Your down payment

The down payment is the part of the price you pay yourself. The rest is the mortgage. Under federal rules in force since December 15, 2024, an insured mortgage (less than 20% down) needs at least 5% on the first $500,000 of the price and 10% on the portion above that, for homes priced below $1.5 million (insured mortgages are not available at $1.5 million or more). Ask a mortgage professional how this applies to you, and whether rules have changed since this page was last checked.

If your down payment is less than 20%, your mortgage must usually be insured against default, and the insurance premium is typically added to your mortgage.

2. Your mortgage

Questions to ask when you compare mortgages:

• Fixed or variable rate. A fixed rate stays the same for the term. A variable rate can move.
• Term and amortization. The term is how long your rate and conditions last (often 1 to 5 years). The amortization is how long it would take to pay the whole mortgage off. A longer amortization lowers the payment but costs more in interest. Since December 15, 2024, first-time buyers and buyers of new builds can choose 30 years on an insured mortgage.
• Payment frequency. Monthly, bi-weekly or accelerated payments can change how fast you pay it down.
• Prepayment privileges. How much extra you can pay each year without a penalty.
• Penalty to break the mortgage. Find out how it is calculated before you sign.
• Portability and renewal terms.

Lenders also check that you could afford the payments at a higher rate than your contract rate (the “stress test”), and this can reduce the amount you qualify for.

3. Land transfer tax

In Ontario you pay land transfer tax when the property is registered in your name. For a property with one or two single-family residences, the Ontario government lists these rates:

Portion of the price	Rate
Up to $55,000	0.5%
$55,000 to $250,000	1.0%
$250,000 to $400,000	1.5%
$400,000 to $2,000,000	2.0%
Over $2,000,000	2.5%

Worked example (illustration only). For a home priced at $800,000: 0.5% of $55,000 is $275; 1% of the next $195,000 is $1,950; 1.5% of the next $150,000 is $2,250; and 2% of the remaining $400,000 is $8,000. Together, that is $12,475 in Ontario land transfer tax. A first-time buyer who qualifies for the refund (up to $4,000) would pay about $8,475.

Verified on 4 October 2026. Rates are from the Ontario government’s page, updated 22 April 2026. The first-time homebuyer refund is up to $4,000, from a page updated 10 February 2026. To qualify you must be at least 18, have never owned a home anywhere in the world, be a Canadian citizen or permanent resident, and move in within 9 months.

Toronto. Homes in the City of Toronto are also charged a separate municipal land transfer tax. First-time buyers may get a rebate of up to $4,475, according to the City’s page updated 18 December 2025. Check the City’s page for the municipal rates and conditions.

Non-residents. Ontario’s Non-Resident Speculation Tax, at 25% since October 25, 2022, can apply to some buyers who are not Canadian citizens or permanent residents. Ask your lawyer before you make an offer.

4. Legal fees and title insurance

You need a real estate lawyer to close. Their fee covers reviewing the agreement, searching the title, arranging the transfer and your mortgage documents, and handling the money. You will also usually pay for:

• Disbursements: the lawyer’s out-of-pocket costs, such as registration and searches
• Title insurance: a one-time premium that protects you against certain title problems

Ask your lawyer for a written estimate of all fees and disbursements before you hire them.

5. Adjustments on closing

The seller may have prepaid things, such as property tax or condo fees, for a period after closing, and you reimburse them. If they have fallen behind, the amounts go the other way. Your lawyer prepares a statement of adjustments that shows exactly what is owed, based on the closing date. Typical items include:

• Property taxes
• Condo fees
• Utilities, if applicable
• Fuel, such as oil or propane

6. Other costs to plan for

• Home inspection (see the Home Inspection Guide)
• Appraisal, if your lender requires one
• Home insurance, needed from your closing date
• Moving costs, changes of address and utility set-up
• Immediate repairs or furnishings
• For condos: possibly the cost of the status certificate and any move-in fees
• For new builds: extra charges at closing for items such as development charges, levies and utility connections, plus GST/HST and any rebates. See the Pre-Construction Guide.

7. A simple way to total it up

Add up these numbers, using your lawyer’s and lender’s estimates:

1. Down payment
2. Land transfer tax (minus any refund)
3. Legal fees, disbursements and title insurance
4. Adjustments
5. Inspection, appraisal and insurance
6. Moving and immediate costs

Compare the total to the cash you have set aside, and keep a cushion for the unexpected.

Questions to ask before you commit

• What is my total cash needed on closing day, in writing?
• Which of these costs depend on the price and which are fixed?
• Does my down payment come from sources my lender will accept?
• What would my payment be if rates were higher at renewal?