Get notified by email alerts for new listings and price reductions in your favourite neighbourhood(s)
Closing costs refer to a large variety of different fees and charges associated with the completion of your mortgage deal, including all legal and administrative expenses you’ll be responsible for paying leading up to, or on, your home’s closing date. It’s important to include these costs in your budget because, in most cases, they can’t be rolled into your mortgage payments.
Important: Include closing costs in your budget because, in most cases, they can’t be rolled into your mortgage payments
Key Takeaways:
Closing costs range depending on the specific property you plan to purchase but, as a safe estimate, set aside 5% of the purchase price as a buffer to cover these expenses. They typically amount to anywhere from 3-5% of the home’s price, but it’s always wise to err on the side of caution by saving more money than you need. Any surplus can be used to help furnish and decorate your new home, or put aside for future maintenance costs. There really is no such thing as saving too much.
Tip: If you save more in your budget for closing costs than you need, any surplus can be used to help furnish and decorate your new home
Here are some of the most popular closing fees you can expect to pay:
Tip: You can avoid an interest adjustment by scheduling your first mortgage payment exactly one payment period after your closing date
You may not have to pay all of the closing costs listed above, especially if you’re a first-time homebuyer. We’ll give you a complete rundown of all costs as soon as your mortgage is approved and suggest any available rebates to help you save as much money as possible.
HST/GST is only charged on new builds so, if you’re purchasing a resale home, you won’t have to worry about this expense.
In certain circumstances, depending on the specific property, you may not have to pay for a survey if the lender will accept an existing one.
You can avoid paying an interest adjustment by scheduling your first mortgage payment exactly one payment period after your home’s closing date.
The main closing cost paid by sellers is real estate commissions, which are typically split between the buyer’s and seller’s agent.
In some cases, a seller will pay for a pre-inspection by a home inspector to help set buyers’ minds at ease that they’re making a sound investment in buying this property.
For many people, saving for a down payment is difficult. While it’s recommended that you put down as much as possible to reduce your mortgage amount, the minimum requirement in Canada is 5% for the first $500,000 and 10% for any portion above that threshold. If your down payment is less than 20%, you’ll be required to obtain mortgage default insurance, which protects your mortgage lender should you be unable to make your payments.
Mortgage insurance is payable upon closing, or it can be rolled into your monthly mortgage payments. This latter option makes it subject to interest, so we’ll make sure you understand what each option involves.
The following table shows you the mortgage insurance fees from CMHC as of January 12th, 2021.
Looking for info on selling your home or an assessment on your property? Fill in the form below and I’ll get back you within 24 hours.
Debra Trevisan
Henry TSE
Rachel Brower
Heiko Schmitz
Heiko Schmitz
The Living Group of Companies is one of the largest independent REALTOR® organizations in the Greater Toronto Area, with a high standard of customer care and agent experience.
7 Hayden Street
Toronto, Ontario
M4Y 2P2
Cell: 416-697-1969
Office: 416-975-9889
Fax: 416-975-0220
www.livingrealty.com
Webpage designed by: Massimo Marotta