Home Purchase One Time Closing Costs

Other costs (upfront, closing costs)

canstockphoto14997015Many first time buyers focus too much on the down payment and not enough consideration is given to all the one time closing costs which you can expect to pay on the day you collect the keys from your lawyer.

ONTARIO LAND TRANSFER TAX: First-time home buyers are eligible for a refund of up to $4,000. Based on Ontario’s land transfer tax rates, this rebate will cover the full tax for homes up to $368,250

TORONTO LAND TRANSFER TAX: Toronto residents pay an additional Municipal Land Transfer Tax. First-time home buyers are eligible for a rebate up to $4,475. Based on Toronto’s tax rate, the rebate will cover the full Toronto LTT on homes worth $400,000 or less.

Use our calculator to estimate your own closing costs.

HIGH RATIO (CMHC) INSURANCE: If your down payment is less than 20% of the property’s purchase price, your mortgage is called ‘high-ratio’ and “A lenders” will require you purchase mortgage default insurance. (People often call this CMHC insurance)
The insurance cost is based on a sliding scale that ranges from .6% to 4.5 % of the mortgage amount. You are allowed to add it to your mortgage balance rather than come up with the premium out of your pocket on the closing date.
PST ON CMHC INSURANCE: Provincial sales tax (8% in Ontario) will be charged on default insurance fees, and must be paid upfront at closing and may not be included in the mortgage.

CLOSING ADJUSTMENTS: Often the seller will have made payments such as property taxes or condo fees that cover a period that goes beyond the purchase date. Adjustments for these are settled on your closing date.

INTEREST ADJUSTMENT (IA): Say your purchase closes June 16th, and your first mortgage payment is due August 1st, you will pay an IA worth 15 days of interest charges for the period from June 16 to July 01.

HST ON NEW HOME PURCHASES: New home purchases are subject to HST, all new home buyers qualify for a rebate up to a maximum of $24,000. You may only be vaguely aware of this as many builders adjust their sales price upfront for this.

TITLE INSURANCE: Title Insurance is arranged by your lawyer, and has essentially replaced the old system of the seller producing a survey. For a $500,000 home the cost

NEW HOME WARRANTY PROGRAM PREMIUMS: New home builders in Ontario are required to buy warranty coverage for each home they build. Sometimes it is included in the purchase price, and other times it is a surprise on the closing date.
NEW CONDO BUILDINGS sometimes have other surprise fees on the closing date – always have your real estate lawyer review your agreement of purchase and sale during the ten day cooling off period

Status/Estoppel Certificate: For condo purchasers only. This document outlines the condominium corporation’s financial and legal affairs. By rule, the charge for this certificate cannot exceed $100.

CMHC’s  estimate the total cost of your home purchase will help you keep track of them all.

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