Start with the cash required before closing
A mortgage approval does not cover every expense. Buyers normally need accessible funds for the deposit, remaining down payment, legal work, taxes, adjustments, moving costs and an emergency reserve. The right amount depends on the purchase price, location, property type and mortgage structure.
- Offer deposit payable according to the purchase agreement
- Remaining down payment due through the lawyer
- Ontario land transfer tax and, when applicable, municipal land transfer tax
- Legal fees, title insurance and registration costs
- Property-tax, utility, fuel or condominium-fee adjustments
- Home inspection, appraisal and moving expenses when applicable
Down payment and mortgage default insurance
The down payment reduces the amount you need to borrow. When mortgage default insurance is required, the premium is generally added to the mortgage rather than paid entirely in cash, but applicable sales tax on the premium may be payable at closing. Eligibility and minimum down-payment rules can change, so confirm the current requirements for your purchase.
Estimate Ontario land transfer tax
Ontario land transfer tax is based on the value of the consideration for the property. Toronto buyers may also face a municipal land transfer tax. Eligible first-time buyers may qualify for rebates, but the eligibility rules, occupancy requirements and maximum rebate should be confirmed before relying on them.
Budget for legal work and closing adjustments
Your lawyer registers the transfer and mortgage, reviews title, completes required searches, manages closing funds and explains adjustments. Adjustments reimburse the seller for certain prepaid property expenses that benefit you after closing. Ask for an estimate early and keep a buffer because the final statement of adjustments may not be available until close to completion.
Build a safer home-buying budget
- Keep closing funds separate from your day-to-day account
- Document where the down payment and deposit came from
- Do not use every available dollar for the purchase
- Allow for immediate repairs, furnishings and moving costs
- Recheck the payment and closing budget before removing financing conditions
Frequently asked questions
How much should I budget for closing costs in Ontario?
The amount varies with the purchase price, municipality, property and mortgage. Build an itemized estimate instead of relying on one percentage, and keep an additional buffer for adjustments and unexpected expenses.
Is the home-buying deposit part of the down payment?
Generally, the deposit forms part of the total down payment, but it is paid earlier under the purchase agreement. The balance of the down payment is delivered through the lawyer at closing.
Do first-time home buyers pay Ontario land transfer tax?
Eligible first-time buyers may receive a rebate, but eligibility and limits apply. Confirm the current Ontario and, if relevant, Toronto rules with your lawyer before calculating the final cash required.
Can closing costs be added to the mortgage?
Many closing costs must be paid from your own available funds. Some mortgage-related costs may be financed in limited circumstances, but this should not be assumed when planning the purchase.
Reviewed by Sunny Nayyar, Mortgage Agent Level 2FSRA #M23007062Tango Ontario Brokerage #13691Serving OntarioUpdated September 18, 2026
