Typical Home Buying Costs

Below we will go ever the most common home buying costs when buying a house in Ontario, so you have a good idea on calculating closing costs so there’s no surprises when you buy a home.

Down Payment

Technically the down payment in not a cost, as it goes towards the purchase price. In Canada, you need minimum of 5% down payment to buy a home with mortgage insurance, and 20% down for a conventional mortgage.

Since this article was written, the government of Canada has made changes to the minimum down payment that you can make on a home in Canada. It is now based on the cost of the home you purchase:

  • For the first $500,000 or less, the minimum downpayment is 5% of the purchase price
  • For any amount over $500,000 and up to 1 Million it is 10% on the portion over $500,000
  • For properties 1 Million or more it’s 20% of the purchase price

For example, if you were to buy a $600,000 house you would have to put $25,000 (5%) down on the first 500,000 and then another $10,000 (10%) on the additional $100,000. So the total minimum down payment would be $35,000. See the government web page for more information on minimum down payments.

This means that on a $600,000 home, you would be able to borrow $565,000 on your mortgage and you would be responsible for paying $35,000 on closing.

It’s important to note that the down payment is not the deposit. You are required to have the funds for the down payment by closing day, so be sure to confirm this with your lender ahead of time.


A deposit is a good faith payment you make once your offer to purchase is accepted. The good news is that the deposit goes towards your down payment, with the rest of the down payment due on closing date.

I wish it was as easy as providing you with a deposit calculator so you would know exactly how much to set a side, but unfortunately there is no set down payment for buying a house in Ontario. That’s because down payments are negotiable, however there are ‘norms’ for every market so be sure to check with your realtor.

In Ontario, the standard time limit is to provide the deposit is within 24 hours of acceptance. To avoid any issues with the deal be sure to have the deposit money set aside and easily accessible so you don’t miss this timeline.

Deposits are normally held in trust by the listing brokerage and they are insured against loss in Ontario so they are protected. Keep in mind that if for some reason you back out of the deal after all conditions have been waived and it’s a firm and binding deal, you may lose your deposit on top of being liable for legal damages.

Having proper representation and understanding the process is critical to ensuring that you have a good home buying experience.

Home Inspection

In Ontario, it is ‘Buyer Beware’ when purchasing a home. That’s why it’s strongly recommended that you include a condition on home inspection in your offer to purchase.

The home inspection protects the buyer by giving them the chance to have the property inspected to ensure there are no hidden surprises that the buyer was unaware of. The typical cost of a professional home inspection is between $400-$600 depending on the size of the home and the expertise of the inspector. Prices to vary so feel free to call around before placing an offer to get quotes.

Ontario Land Transfer Tax

In Ontario the home buyer is responsible for paying taxes on the land transfer. The tax is progressive, meaning on the first $50,000 you pay 0.5% and then from 50-250,000 you pay 1% on that money.

For example on a $400,000 home you will pay $4475 in Land Transfer tax. However, the good news is that if you are a first time homebuyer you qualify for a rebate on the first 200k so that means you will pay only $2475.

Note that if you are purchasing in the City of Toronto, you are responsible for both the Provincial land Transfer tax and the Toronto land Transfer Tax. So using the same example, the total tax on the same $400,000 house purchased in Toronto would be $8200. The City of Toronto also offers a rebate for first time home buyers.

The easiest way to calculate the land transfer tax is to use my calculator below. It’s self explanatory but enter the purchase price, select Ontario or Ontario (Toronto) and it will calculate the taxes owing.

Land Transfer Tax Calculator

Legal Fees for Buying a House in Ontario

A Lawyer acts for you when transferring title and arranging the mortgage. They are the guarantor, they legally make sure all money is properly transferred and such.

Your lawyer is also responsible for arranging title insurance and other disbursements. There is no set fee for legal services, however a good rule of thumb is to estimate $1500-$2000 for the cost of legal feels (including title insurance). Feel free to contact a number of lawyers before placing an offer to get quotes.

Typical Home Buying Costs Summary

The costs above are the typical costs associated with buying a typical home in Mississauga, Oakville or the GTA. In certain cases there can be additional upfront costs that can be negotiated between buyer and seller or with your service provider such as:

  • Mortgage Appraisal Fee
  • Land Survey
  • Water and Septic Tank Inspections (rural properties)
  • Status Certificate (Condo)
  • Mortgage Lender Fee

Your realtor will be able to go over these additional costs and help you determine if they apply to your situation.

There you have it, a list of the Typical Home Buying Costs explained. I hope you found this article informative. If you’re considering buying a home in Mississauga, Oakville or the west GTA and would like to receive more information about the home buying process feel free to contact me or fill out the form at the bottom of the page.

  • The Village Guru
  • This field is for validation purposes and should be left unchanged.