Closing costs are the fees, taxes, and charges due at the time of property transfer — separate from your down payment and separate from mortgage principal. For most Canadian buyers, closing costs add 1.5% to 4% on top of the purchase price. For US buyers, they typically run 2% to 5% of the loan amount. On a $700,000 purchase, that is a cash requirement of $10,500 to $28,000 that must be liquid and available on closing day.

Many buyers under-budget for closing costs because they focus on the purchase price and down payment. Failing to account for closing costs can derail a transaction — or force a buyer to draw on emergency funds at the worst possible time. This guide breaks down every item, provides real dollar ranges, and explains which costs are fixed versus negotiable.

Get an instant estimate with our Canadian closing costs calculator or our US closing costs calculator. For land transfer tax specifically, see our complete Canadian LTT guide.

Canadian Closing Costs: Full Itemized List

Canadian closing costs fall into two categories: government-mandated costs (LTT, registration fees) and professional/insurance costs (legal, inspection, title insurance). Both must be budgeted in cash — they are not typically rolled into the mortgage.

1. Land Transfer Tax

The single largest closing cost in most Canadian provinces. Ontario buyers pay a marginal rate from 0.5% to 2.5%. Toronto buyers pay provincial LTT plus an equal municipal LTT — approximately 2x Ontario rates. BC buyers pay 1%–3%+ (Property Transfer Tax). Alberta and Saskatchewan charge only nominal title transfer fees. First-time buyers in Ontario receive up to $4,000 back; in BC up to $8,000 back on properties under $500,000.

Example LTT on $700,000 Ontario Purchase
  • Outside Toronto: ~$11,725
  • Inside Toronto: ~$11,725 (provincial) + ~$10,725 (municipal) = ~$22,450
  • First-time buyer outside Toronto: ~$7,725 after $4,000 rebate
  • First-time buyer inside Toronto: ~$13,975 after combined $8,475 rebate

2. Legal Fees: $1,000–$2,500

Every Canadian real estate purchase requires a lawyer (or in Quebec and BC, a notary) to review title, prepare and register the deed, discharge the seller's mortgage, and handle the trust funds. Legal fees for a straightforward residential purchase typically range from $1,000 to $2,500 plus disbursements (title search, registration fees, courier costs). Disbursements of $300–$600 are typical. Complex transactions — condos with status certificates, rural properties with well and septic — cost more.

3. Title Insurance: $250–$400

Title insurance protects the buyer (and their lender) against title defects not discovered during the standard title search — encroachments, undisclosed liens, survey errors, and fraud. Most Canadian lenders require it. A residential title insurance policy is a one-time premium, typically $250–$400 for a $700,000 home. It covers the buyer for as long as they own the property and often eliminates the need for a new survey ($1,500–$2,500).

4. Home Inspection: $400–$650

A qualified home inspector examines the property's structural integrity, roof, foundation, electrical, plumbing, and HVAC systems. While technically optional, skipping a home inspection on a resale property is a significant risk. Fees range from $400 to $650 for a typical single-family home, more for larger or older properties. Condos typically cost $250–$400 since the inspector is reviewing only the unit.

5. CMHC Mortgage Insurance (If Applicable): 2.8%–4% of Mortgage

If your down payment is less than 20% of the purchase price, Canada Mortgage and Housing Corporation (CMHC) requires mortgage default insurance. This is not optional — it is a condition of the insured mortgage. The premium is:

  • 5%–9.99% down payment: 4.0% of the insured mortgage amount
  • 10%–14.99% down payment: 3.10% of the insured mortgage amount
  • 15%–19.99% down payment: 2.80% of the insured mortgage amount

On a $700,000 home with 10% down ($70,000), the insured mortgage is $630,000. CMHC premium at 3.10% = $19,530. This is typically added to the mortgage and not paid at closing, but Ontario and Quebec buyers also pay provincial tax on the premium at closing — roughly $2,442 in Ontario (HST on $19,530 at 12.5% net).

6. Property Tax Adjustment

If the seller has prepaid property taxes, the buyer reimburses the unused portion. If the seller owes, an adjustment is made in the buyer's favour. This is handled in the lawyer's trust account and appears on the Statement of Adjustments. It is a cash-flow consideration, not an additional cost in most cases.

7. Interest Adjustment

Mortgages typically have a first payment date 30 days after closing. If your closing date is not the first of the month, the lender charges interest on the mortgage from the closing date to the first of the following month (the interest adjustment date). On a $500,000 mortgage at 5%, a mid-month closing means roughly $1,000–$1,400 in interest adjustment due at closing.

8. Moving Costs, Utility Hookups, and Minor Items

Budget $800–$3,000 for moving depending on distance and volume. Utility connection fees, mail forwarding, and address changes are nominal. Some buyers also face unexpected costs — a mandatory status certificate for a condo ($100), a condominium estoppel certificate, or a survey.

US Closing Costs: Full Itemized List

US closing costs differ significantly from Canadian ones. The mortgage system, title insurance structure, and escrow requirements create a different cost profile. US buyers typically pay 2%–5% of the loan amount in closing costs, while sellers typically absorb agent commissions and transfer taxes.

Loan Origination Fee: 0.5%–1% of Loan Amount

Charged by the lender for processing the mortgage application. On a $400,000 loan, origination fees run $2,000–$4,000. Some lenders offer "no-origination-fee" mortgages at a slightly higher interest rate — worth comparing over the expected hold period.

Appraisal: $400–$650

US lenders require a licensed appraiser to value the property before approving the mortgage. If the appraisal comes in below the purchase price, the lender will only fund the lower amount — creating a potential gap the buyer must cover or renegotiate.

Title Search and Title Insurance: 0.5%–1% of Purchase Price

Unlike Canada's one-time buyer policy, US title insurance is more complex. Lenders require a Lender's title insurance policy (protecting the bank). Buyers are strongly encouraged to purchase an Owner's title policy separately. On a $400,000 purchase, combined title costs including title search, examination, and both policies typically run $1,500–$3,500.

Attorney Fees: $500–$1,500 (Required in Some States)

Approximately 21 US states require a real estate attorney at closing. In states like New York, Massachusetts, South Carolina, and Georgia, attorney review of the closing documents is mandatory. Fees vary significantly by state and transaction complexity.

Prepaid Items and Escrow Setup

US lenders typically require prepaid items at closing: (1) Homeowners insurance premium for the first year ($800–$2,000), (2) Two months of homeowners insurance deposited to escrow, (3) Two to three months of property taxes deposited to escrow (varies by state), and (4) Prepaid mortgage interest from closing date to the end of the month. Total prepaid/escrow requirements commonly run $3,000–$8,000 depending on property taxes and insurance rates in the area.

Transfer Taxes (Seller-Side in Most States)

Unlike Canada where LTT is always a buyer cost, US transfer taxes (called deed taxes, documentary stamp taxes, or realty transfer fees) are split between buyer and seller in some states and paid entirely by the seller in others. States with no transfer tax include Texas, Wyoming, and Idaho. New York, Pennsylvania, and Delaware have significant transfer taxes.

US Loan Estimate Requirement US lenders are required by law (RESPA/TRID) to provide a Loan Estimate within three business days of your mortgage application. This document itemizes all projected closing costs. Review it carefully — compare it against the Closing Disclosure you receive three days before closing to spot any unexpected increases.

How to Estimate Your Total Closing Costs

The fastest way to estimate total closing costs is to use our calculators: the Canadian closing costs calculator or the US closing costs calculator. For manual estimation, follow this framework:

Canada: Rough Budget Rule

Budget 1.5%–2% of purchase price for closing costs outside Alberta (no LTT). Add LTT on top using our calculator. If CMHC-insured (under 20% down), add provincial HST/PST on the CMHC premium. In Ontario outside Toronto: budget 2.5%–3.5% total. In Toronto: budget 3.5%–5% total due to double LTT.

US: Rough Budget Rule

Budget 2%–3% of the purchase price for buyer closing costs in most states, with an additional 1%–2% for prepaid items and escrow setup. High-cost states (New York, California) or transactions in attorney-required states may push the total to 3%–5% of the loan amount.

Tips to Reduce Closing Costs

  • Shop legal fees: Real estate lawyer fees are not standardized. Getting two or three quotes is common and can save $300–$700.
  • Claim first-time buyer LTT rebates: Ontario rebate up to $4,000; BC up to $8,000 on eligible properties. These must be applied at the time of closing.
  • Negotiate seller concessions (US): In the US, buyers can ask sellers to pay a portion of closing costs ("seller concessions"), especially in slower markets. This is less common in Canada.
  • Increase down payment above 20%: In Canada, crossing the 20% threshold eliminates CMHC insurance entirely — a saving of 2.8%–4% of the mortgage amount.
  • Close near end of month (US): Prepaid mortgage interest is charged from closing to month-end. Closing on the 28th versus the 15th reduces this prepaid by approximately half.
  • Compare title insurance providers: In Canada, Stewart Title and FCT are the two major providers. Rates are competitive and your lawyer can obtain quotes from both.
  • Ask about rolled-in fees (US): Some lenders roll origination fees into the interest rate. If you plan to hold the property long-term, a slightly lower rate often outperforms a reduced origination fee.

For real estate lawyers advising clients on transactions, accurate closing cost estimates are a key value-add. See how LexScale.ai supports real estate law firm growth and how our Canadian real estate calculators can be embedded in your firm's client intake process.

Frequently Asked Questions

How much are closing costs in Canada?
Canadian closing costs typically range from 1.5% to 4% of the purchase price, depending on the province and whether you're a first-time buyer. The single largest cost is usually land transfer tax (LTT), which ranges from nothing (in Alberta) to over $16,000 on a $900,000 Ontario purchase. Other major costs include legal fees ($1,000–$2,500), title insurance ($250–$400), home inspection ($400–$600), and CMHC mortgage insurance (2.8%–4% of the mortgage amount) if your down payment is less than 20%.
What closing costs does the buyer pay in Canada vs the seller?
In Canada, the buyer typically pays land transfer tax, legal fees for the purchase side, title insurance, home inspection, and CMHC insurance (if applicable). The seller pays real estate agent commissions (typically 3%–5% of the purchase price, split between buyer's and seller's agents), their own legal fees, and any outstanding property tax adjustments or condo fee prepayments. Unlike the US, Canadian sellers rarely pay transfer taxes or title insurance — those are predominantly buyer costs.
What are typical closing costs in the United States?
US closing costs typically range from 2% to 5% of the loan amount for buyers. Common costs include loan origination fees (0.5%–1% of the loan), appraisal ($400–$600), title search and insurance (0.5%–1% of the purchase price), attorney fees (required in some states, $500–$1,500), prepaid items (homeowners insurance, property tax escrow, prepaid interest), and recording fees ($50–$250). Sellers in the US typically pay real estate commissions (5%–6% of sale price), transfer taxes, and their share of title costs. Total buyer closing costs on a $400,000 US home typically run $8,000–$20,000.
Which closing costs in Canada are negotiable?
Several Canadian closing costs are negotiable or avoidable. Legal fees vary significantly between lawyers — comparing quotes from two or three real estate lawyers can save $300–$800. Home inspection is optional (though inadvisable to skip) and fees vary by inspector and property size. Title insurance premiums are relatively fixed but some insurers offer slightly better rates. CMHC insurance is non-negotiable if your down payment is under 20%, but increasing your down payment above the 5%, 10%, or 20% thresholds changes the premium tier. Real estate agent commissions on the seller side are negotiable and have become more competitive following industry changes. Land transfer tax and title transfer fees are government levies and cannot be negotiated.
James Harmiden
Published July 9, 2026

The LexScale.ai editorial team creates definitive guides on real estate law and property transaction costs for buyers, sellers, and their lawyers across North America. Our calculators help law firms provide clients with accurate cost estimates at the intake stage.