Many first-time buyers focus on the down payment and forget the closing costs. Because closing costs generally must come from your own funds, you should plan for them early. This list covers what to expect in Ottawa.
Common closing costs
| Cost | What it is |
|---|---|
| Ontario land transfer tax | A tiered tax on the purchase price. Ottawa has no municipal land transfer tax. Use our calculator. |
| Legal fees and disbursements | Your lawyer or notary reviews the contract, searches title, registers the transfer and mortgage, and handles funds. |
| Title insurance | A one-time premium that protects against title problems and fraud. |
| Home inspection | An inspection before you finalize the purchase. |
| Appraisal | Sometimes required by the lender. |
| Property tax and utility adjustments | Reimbursing the seller for bills they prepaid. |
| Ontario sales tax on default insurance | If you have an insured mortgage, provincial sales tax on the premium is paid in cash at closing. |
| Condo status certificate | For condo purchases, a review of the condo corporation’s finances. |
| Moving and set-up | Movers, utilities set-up and immediate repairs. |
A simple example
For a $650,000 home, Ontario land transfer tax is $9,475 (or about $5,475 for an eligible first-time buyer after the rebate). Add legal costs, title insurance, adjustments and other items, and total closing costs can reach a few percent of the price. Use our mortgage calculator for the mortgage side and ask your lawyer for a written estimate.
Ways to reduce or plan for closing costs
- Claim the first-time buyer land transfer tax rebate if you qualify. See the first-time buyer guide.
- Ask lenders whether they cover the appraisal or legal fees on certain mortgage products.
- Get quotes from lawyers before you commit.
- Keep a cash cushion for surprises on possession day.
Frequently asked questions
Can I roll closing costs into my mortgage?
Generally no. Lenders expect closing costs to come from your own funds, separate from your down payment. Some lenders offer cash-back products, but they usually come with a higher rate.
How much should I save for closing costs in Ottawa?
A common guideline is 1.5% to 4% of the purchase price. Add up the specific items for your purchase to get a better number.
When are closing costs due?
Most are paid to your lawyer shortly before closing so they can be paid out on possession day.
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