2026 Canada Closing Costs Guide: What Homebuyers Actually Pay at the Table
Closing costs are the fees and expenses due on possession day — separate from your down payment — and they typically add up to 1.5%–4% of your home's purchase price in Canada.
TL;DR
Land transfer tax is usually the largest closing cost: Ontario, BC, and Quebec each have their own tax structure, and Toronto buyers pay a second municipal layer on top of the provincial tax.
Legal fees (including a real estate lawyer or Quebec notary) and title insurance together typically cost $1,500–$1,800 and are mandatory in every Canadian province.
A home inspection (approximately $500) is not legally required but is strongly recommended — it can reveal costly defects before you're legally committed to the purchase.
Expert Research FAQ
What equity sources are acceptable for a down payment?
Your lender needs to confirm where your down payment money is coming from to make sure it's really yours.
If someone gifts you money for your down payment, you'll need a letter stating you don't have to pay it back.
Using borrowed money for your down payment can make getting approved harder, so your lender will look closely at this.
Government programs that give you cash back can be used as part of your down payment.
How are debt service ratios calculated, and why are they important?
Lenders use debt ratios to make sure you can comfortably afford your mortgage payments.
To check affordability, lenders use either your mortgage interest rate plus 2%, or 5.25%, whichever is higher.
Your property taxes and condo fees are included when the lender calculates how much you can afford.
Heating costs are factored into your affordability assessment, and these costs can vary depending on where you live.
How do financial institutions assess property values?
When figuring out your home's value, lenders look at location, property type, how you'll use it, market trends, and the overall housing market.
If home prices are rising quickly, lenders might use a slightly lower value for your home to be extra careful when calculating your mortgage.
Lenders can adjust a property's value to be more accurate when figuring out how much they'll lend you.
To determine your home's value, lenders may use on-site inspections, professional appraisals, or online tools.
Your lender should carefully review how they determine your home's value to make sure it's accurate.
Primary sources
Primary sources cited by the Ratellow Research Team. Editorial standards · Correction policy
Frequently Asked
What equity sources are acceptable for a down payment?
How are debt service ratios calculated, and why are they important?
How do financial institutions assess property values?
What closing costs should I expect as a buyer in Canada?
What is a Statement of Adjustments and what does it show?
How does HST/GST work on new construction at closing in Canada?
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