Closing Costs

closing costs

Closing Costs in Real Estate Contracts in Canada

Buying a property in Canada can be an exciting experience, but it’s important to be aware of all the associated costs before you sign the final agreement. One of the important costs to consider is closing costs.

Closing costs are all the fees you’ll need to pay to finalize the purchase of your property. These costs are paid in addition to the purchase price of the property and can significantly impact your budget.

Types of Closing Costs

There are various types of closing costs you may encounter. Some of the most common ones include:

  • Legal fees: These fees are paid to your lawyer for reviewing documents and providing legal advice on the transaction.
  • Title insurance: This insurance protects you from potential claims against the ownership of the property.
  • Land transfer taxes: These taxes are charged by the Canadian government based on the value of your property.
  • Registration fees: These fees are paid to register your ownership of the property with the land registry office.
  • Inspection fees: These fees are paid to have the property inspected for potential structural problems or other issues.
  • Mortgage setup fees: These fees are paid to your lender for processing your mortgage.
  • Municipal property taxes: These taxes are paid annually to your local municipality.
  • Home insurance premiums: These fees are paid for your property insurance.

Amount of Closing Costs

The amount of closing costs can vary depending on several factors, including the purchase price of the property, your location, and the type of mortgage you choose. In general, you can expect to pay between 1.5% and 4% of the purchase price of your property for closing costs.

closing costs

Ways to Reduce Closing Costs

There are a few things you can do to reduce your closing costs:

  • Compare quotes from different lawyers and lenders: Before choosing a lawyer or lender, be sure to compare quotes from several different companies.
  • Choose a lower-priced property: The lower the purchase price of your property, the lower your closing costs will be.
  • Negotiate fees: Negotiate with your lawyer, lender, and other service providers for their fees.
  • Choose a low-cost mortgage: Look for a mortgage with low closing costs.

Importance of Being Aware of Closing Costs

Being aware of closing costs is crucial before buying a property in Canada. These costs can significantly impact your budget, so it’s important to plan for them.

Key Points for Mortgage Brokers

Educate clients about closing costs: It’s essential to educate your clients about the different types of closing costs and how to reduce them.
Provide accurate closing cost estimates: Provide your clients with accurate closing cost estimates so they can plan accordingly.
Discuss various financing options with clients: Discuss various financing options with your clients to help them find the lowest-cost mortgage.


Closing costs are an essential part of the real estate purchase process in Canada. By being aware of these costs and planning for them, you can avoid unpleasant surprises when finalizing your transaction.

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