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How Much Are Closing Costs in Canada

There are quite a few measures one needs to take before purchasing a property. Families in Canada need to come up with a minimum of 5% down-payment or more. But that isn’t all there is to it. There are various closing costs that most families fail to consider that are known as closing costs, and they can end up being a lot down the line for a family that isn’t prepared for them.

Budgeting For Closing Costs

It isn’t the end of the world, of course! There are several ways you can budget for closing costs. By default, you should have a minimum of 1.5% of your house's value as part of closing costs. Suppose you have your eyes set on a home that costs $300,000 in Canada. You must have saved up at least $4,500 in funds to pay closing costs. Without having saved this amount, likely, you will not qualify for an insured mortgage.

In the circumstances that you are buying and selling a property at the same time, that makes for two separate transactions. You should be mindful that your closing costs will be rather high. To cover them properly and still qualify for an insured mortgage, make it your goal to have at least 4-5% of the property’s market value to cover closing costs.

Closing Costs

4-5% of your property’s overall value can be rather significant. We don’t recommend you save this much just to cover your lawyer’s fee, though that is part of it. Let’s break it down to simplify the costs a little that you must prepare for.

Legal Fees

As we mentioned earlier, your lawyer’s fee is only part of the overall closing costs. When you buy or sell a property, all of the matters are handled by your lawyer, especially when there is an exchange of money concerned. Typically, your lawyer may charge you between $500 and $1000, but the cost is dependent on what kind of lawyer you hire. You should hire a real estate lawyer precisely so that they can identify potential property red flags to you.

Land Transfer Tax

The land transfer tax you pay depends on where you live in Canada. This tax must be paid whenever someone purchases a resale property and is included in the closing costs. Typically, LLT is a percentage of the property’s cost.

Survey Fee

When applying for a mortgage for a property, some lenders will insist on having the property surveyed. This can cost anywhere from $500 to $1500, and it is likely that you will have to bear the cost.

There are other costs you must factor in, including building inspection fee, provincial sales tax, property tax, GST, fire insurance, and moving costs.

If you wish to find out more, contact Kyle Adams of Adam’s Mortgage Team now at kyle.adams@ontariolendingsolutions.com .

 


 

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