What closing costs should I budget for in Canada?
Budget 1.5–4% of the purchase price for closing costs. The main items are: land transfer tax (the largest cost in most provinces), legal fees ($1,200–$2,000), title insurance ($250–$500), home inspection ($400–$700), and property tax adjustments. In Ontario, closing costs on a $800,000 home typically total $20,000–$35,000 including LTT. Alberta and Saskatchewan buyers save significantly with no LTT.
What is CMHC mortgage insurance and when is it required?
CMHC (Canada Mortgage and Housing Corporation) mortgage default insurance is required when your down payment is less than 20% of the purchase price. Premiums are 2.8% (10–19.99% down), 3.1% (10–14.99% down), or 4.0% (5–9.99% down) of the insured mortgage amount. The premium is added to your mortgage balance — not paid as cash at closing — but it is subject to provincial sales tax in Ontario, Quebec, and Manitoba.
What are property tax adjustments at closing in Canada?
Since property taxes are often paid in advance, the closing adjustment ensures the buyer reimburses the seller for any prepaid property taxes covering the period after closing. Conversely, if taxes are in arrears, the seller credits the buyer. Your real estate lawyer calculates adjustments for property taxes, utilities, and condo fees as part of the closing statement.