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Buying a home or refinancing your mortgage in Ontario is exciting – but it can also come with a lot of extra costs. Many homebuyers and homeowners are surprised by the closing costs: the fees, taxes, and other expenses due on closing day. Planning for these upfront is essential to avoid last-minute surprises. Our Purchase and Refinance Costs of a Home calculator (below) is designed to give you a clear picture of all the costs involved in your transaction. In this guide, we’ll walk you through a detailed breakdown of typical home purchase costs and mortgage refinance costs in Ontario. You’ll also learn why estimating these costs early can save you money and stress. Throughout, we’ll show how Turkin Mortgage – a trusted Ontario mortgage brokerage – can help you minimize expenses, get great rates, and close your deal smoothly.
Our easy-to-use calculator below will help you estimate the total costs of buying a home or refinancing a mortgage in Ontario. Simply enter a few details (like your home price, down payment, or refinance amount) and let the tool do the math. You’ll get an instant estimate of key expenses such as land transfer taxes, legal fees, and more. This way, you can plan your budget with confidence.
How to use the calculator: Select whether you are purchasing or refinancing, input the requested information (e.g. home price, down payment, mortgage balance, etc.), and the calculator will display an itemized list of expected costs. The results will include things like:
Land Transfer Tax (for purchases) – Provincial (and municipal, if applicable) tax on property purchases.
Legal Fees – Estimated lawyer costs for closing the deal.
Title Insurance – Protection for your property title.
Appraisal Fees – If required by a lender to assess property value.
Mortgage Insurance – If applicable (for low down payments).
Prepayment Penalty (for refinance) – If you’re breaking an existing mortgage early.
Using this calculator gives you a realistic idea of how much cash you’ll need on hand. It’s a great starting point for discussions with your lender or broker. And remember, if anything feels overwhelming, Turkin Mortgage’s experts are just a call away to guide you through it.
(Calculator placeholder – Estimate your costs by entering details)
When purchasing a home in Ontario, closing costs typically range from about 1.5% to 4% of the purchase price (or even up to 5% in some cases). It’s important to budget for these expenses in addition to your down payment. Let’s break down the major home purchase costs you need to prepare for:
Land Transfer Tax is often the largest closing cost when buying a property. In Ontario, the provincial LTT is calculated on a sliding scale based on the purchase price of the home:
0.5% on the first $55,000 of the purchase price
1.0% on the portion from $55,000 to $250,000
1.5% on the portion from $250,000 to $400,000
2.0% on the portion from $400,000 up to $2,000,000
2.5% on any amount above $2,000,000 (for one or two-single family residences)
For example, if you buy a home for $500,000 in Ontario (outside Toronto), your provincial LTT would be about $6,475. If the home costs $800,000, the LTT would be around $12,475. This tax is paid to the Ontario government at closing.
If you’re buying in the City of Toronto, note that there’s an additional municipal Land Transfer Tax equal to the provincial tax – effectively doubling the land transfer taxes for Toronto purchases. The good news for first-time buyers is that both Ontario and Toronto offer rebates on LTT. Ontario first-time homebuyers can get a rebate of up to $4,000 (which can fully cover the tax on homes up to about $368,000). In Toronto, first-time buyers get an extra rebate (up to ~$4,475) on the municipal LTT. This can significantly reduce your tax burden if you qualify.
Turkin Mortgage’s Tip: Land transfer tax is unavoidable for buyers, but our team ensures you’re informed of the exact amount early on. We’ll also help you apply for any first-time buyer rebates you’re entitled to, so you don’t leave money on the table.
You’ll need to hire a real estate lawyer to handle all the legal paperwork when you purchase a home. Your lawyer’s tasks include reviewing the purchase agreement, performing a title search, registering the new title and mortgage, and facilitating the transfer of funds. Legal fees in Ontario typically range from about $800 to $1,500 for a home purchase, depending on the lawyer and complexity of the deal. In addition to the base fee, there will be disbursements – these are out-of-pocket expenses the lawyer pays on your behalf (such as land title registration fees, photocopies, couriers, etc.). Disbursements can add a few hundred dollars extra. All told, it’s wise to budget roughly $1,000 to $2,000 for legal costs on a purchase.
Keep in mind, some mortgage providers or brokers offer specials that can offset this cost. For example, Turkin Mortgage often covers up to $1,000 of your legal fees when you close a mortgage with us. This means you could save a significant amount on your closing costs right away. Our goal is to make your home buying journey as affordable and stress-free as possible, and helping with legal fees is one way we do that.
Title insurance is a one-time premium that protects you (and your lender) against issues with the property’s title or ownership. It can cover problems like undisclosed liens, fraud, errors in public records, or challenges to your ownership that could arise after closing. While title insurance is technically optional for the buyer, most lenders will require you to obtain it as a condition of the mortgage. Even if it weren’t required, it’s a highly recommended safety net for any homeowner.
In Ontario, title insurance typically costs around $250 to $400 for a residential property, depending on the value of the home. This cost is usually paid through your lawyer at closing (the lawyer arranges the policy for you). Unlike other ongoing insurance, you pay it just once and the coverage lasts as long as you own the property. Turkin Mortgage can help explain the best title insurance options, so you’re fully protected without overpaying.
Before finalizing your purchase, it’s very wise to get a home inspection by a certified home inspector. While this isn’t a fee required by the lender or law, it’s a cost most buyers choose to incur to protect themselves. An inspector will examine the property’s structure, roof, electrical, plumbing, and more, and give you a report on any defects or potential issues. Knowing the condition of the home can save you from expensive surprises down the road or give you leverage to negotiate repairs.
A typical home inspection in Ontario costs roughly $300 to $600, depending on the size of the property and complexity. This fee is usually paid at the time of inspection, before closing. It’s not part of your lawyer’s closing disbursements, but it’s certainly part of the overall cost of buying a home. At Turkin Mortgage, we encourage all our buyers to invest in a quality inspection. We can even recommend trusted local inspectors. Peace of mind is worth it when making such a big purchase.
When you’re getting a mortgage, the lender may require a home appraisal to confirm the market value of the property. The appraisal is done by a professional appraiser, and it assures the lender that the home is worth at least as much as the purchase price (since the property is the collateral for the loan). In many cases with traditional lenders, the appraisal fee is covered by the lender or integrated into your mortgage application process. However, some lenders will ask the borrower to pay this fee upfront, especially for unconventional properties or private/alternative lending situations.
If you as the buyer are paying for the appraisal, you should budget approximately $300 to $500 for it. This is usually paid directly to the appraiser or the lender during the mortgage approval process (before closing). The appraisal report will be sent to your lender and sometimes to you as well. Working with a broker like Turkin Mortgage can be beneficial here – we often know which lenders will cover the appraisal for you. We strive to match you with lenders that offer perks (like free appraisals or free legal fees) to help reduce your out-of-pocket costs.
If your down payment is less than 20% of the home’s purchase price, your mortgage will likely be a high-ratio mortgage which requires mortgage default insurance. In Canada, this is commonly known as CMHC insurance (though there are also Genworth/Sagen and Canada Guaranty). The insurance premium is calculated as a percentage of your loan amount, on a sliding scale (e.g., 4% of the loan if you put 5% down, slightly less if you put 10% down, etc.). These premiums can be several thousand dollars. The good thing is the premium itself is usually not paid in cash at closing – instead, it gets added to your mortgage principal and you pay it off over time as part of your mortgage payments.
However, in Ontario there is provincial sales tax (PST) on the insurance premium, which must be paid at closing. Ontario charges 8% PST on the CMHC insurance premium. For example, if your insurance premium (added to the mortgage) is $10,000, the PST would be $800 payable in cash on closing day. This is a closing cost that often surprises first-time buyers. Make sure to account for the PST on any mortgage insurance in your budget. Turkin Mortgage brokers will calculate this for you if it applies, and ensure you’re aware of the total funds needed. If possible, we also explore strategies with you to avoid needing insurance (for instance, if you’re close to 20% down payment, finding a way to reach it can save you the entire premium). Our priority is to save you money in both the short and long term.
In addition to the big-ticket closing costs above, there are a few other smaller items to keep in mind when buying a home:
Property Tax and Utility Adjustments: On closing day, the buyer and seller must settle any prepaid expenses. For instance, if the seller has already paid property taxes or utility bills beyond the closing date, you’ll need to reimburse them for the portion that applies after you take possession. These are called adjustments. Your lawyer will calculate these pro-rated amounts. They can range from a few hundred to a couple of thousand dollars depending on timing and local tax rates.
Home Insurance (Property Insurance): While not a closing “fee” paid to the lawyer, you will need to have home insurance in place as of closing. The insurance premium is often paid annually or monthly. Expect to pay the first premium by closing (or shortly after). Home insurance in Ontario might be about $800–$1,500 per year, depending on the property and coverage. Lenders require proof of insurance before they advance mortgage funds.
Moving Costs: After closing, you’ll also incur moving expenses. If you hire professional movers or rent a truck, this could be anywhere from a few hundred to a couple of thousand dollars. It’s wise to budget for this so you’re not caught short after paying all the closing fees.
Miscellaneous Fees: These might include things like a status certificate fee (if you’re buying a condo, ~ $100), estoppel certificate (for certain properties), or other small administrative charges. Your lawyer will inform you if any apply in your case.
By understanding all these purchase-related costs, you can prepare a comprehensive budget. Turkin Mortgage prides itself on transparency – we make sure our clients know about every cost well in advance. When we pre-approve you for a mortgage, we also discuss estimated closing costs, so you feel fully prepared. No one likes financial surprises, and our proactive guidance ensures you won’t face any.
Refinancing your home means replacing your existing mortgage with a new one (often to get a lower rate, access equity, or change your loan terms). While refinancing can save you money in the long run or help you tap into cash for other needs, it’s important to be aware of the costs involved in the process. Refinancing a mortgage in Ontario will come with some closing costs of its own, although generally fewer than when purchasing. Let’s look at the typical refinance costs:
If you refinance before your current mortgage term is over, you will likely face a mortgage prepayment penalty for breaking your mortgage early. The size of this penalty can vary greatly depending on your mortgage type and how much time is left in your term:
For a fixed-rate mortgage, the penalty is usually the greater of three months’ interest or the interest rate differential (IRD). The IRD calculation compensates the lender for the interest they lose because you’re breaking the contract early, based on current rates and time remaining. On fixed mortgages, this can sometimes amount to thousands of dollars if rates have fallen since you took out your loan.
For a variable-rate mortgage, the penalty is typically simpler: usually three months’ interest on your remaining balance (since variable mortgages often have lower penalties).
If you refinance at the end of your term, no penalty applies because you’re essentially renewing your mortgage (either with your current lender or a new lender) when the contract is up.
It’s crucial to factor in any potential penalty when considering a refinance. Sometimes the interest savings from refinancing to a lower rate or consolidating debt still outweigh the penalty; other times, it might be better to wait until the term is up. Turkin Mortgage can help you calculate any penalties and weigh them against the benefits. We have experience negotiating with lenders too – in some cases, if you’re staying with the same lender for the refinance, we may help get the penalty reduced or waived. Our goal is to ensure refinancing is financially beneficial for you.
When you refinance and especially if you switch to a new lender, your current lender will charge a discharge fee to formally close out (discharge) your existing mortgage. This is basically an administration fee for removing their claim on your property title. Discharge fees in Ontario typically range from about $200 to $350, depending on the lender. It’s a smaller cost, but it’s standard and should be expected. Even if you refinance with the same lender, there might be a smaller discharge or re-registration fee involved.
This fee is usually paid through your lawyer at the time of closing the refinance (it may be deducted from the new funds). Turkin Mortgage will inform you of your current lender’s discharge fee in advance. We also attempt to negotiate or have the new lender cover this cost in some cases as part of a refinance package. Many lenders will, for competitive reasons, absorb the discharge fee when gaining a new client – we’ll help identify those opportunities for you.
Just like a home purchase, a refinance requires legal work – but the process is a bit simpler. A lawyer (or sometimes a title company) needs to handle the registration of the new mortgage and the payout of the old mortgage. They will ensure the new lender’s interest (charge) is registered on title and the old one is removed, and handle all funds transfer.
Legal fees for refinancing are generally a bit lower than for a purchase, because there’s no property transfer, only a mortgage registration. In Ontario, refinance legal fees typically range from roughly $700 to $1,000, plus some small disbursements (like the government registration fee which is around $70, and title search costs). It’s wise to budget around $800 to $1,200 total for the legal costs of a refinance.
The good news is that many lenders and brokers offer promotions to cover or reimburse these legal fees on a refinance. For instance, if your mortgage balance is above a certain amount (commonly > $200,000), a new lender might pay the legal costs to win your business. Turkin Mortgage always looks for no-cost refinance options. We often can arrange for the lender to pay your legal fees, or we provide cash-back that offsets this expense. Our priority is that your refinance saves you money – we’ll work hard to reduce or eliminate this out-of-pocket cost for you.
As with a purchase, lenders usually require an appraisal when you refinance, to confirm the current market value of your home. The appraisal ensures the lender that the loan amount is within acceptable loan-to-value limits. On a refinance, you may be borrowing additional money (tapping into equity), so the value is a critical piece of information for the lender.
An appraisal for a refinance in Ontario will also cost around $300 to $500 typically. Sometimes lenders will waive the need for a full appraisal if their internal systems can estimate your home’s value (for example, some banks use automated valuation models or drive-by assessments). Other times, they insist on a professional appraisal.
Who pays for it? Often, if you’re moving to a new lender, the new lender might cover the appraisal fee as part of their package (especially if you negotiate or go through a broker who can secure that for you). If not, it will be paid by you, either upfront to the appraiser or at closing. At Turkin Mortgage, we know which lenders are likely to cover the cost and we advocate on your behalf to get appraisal fees waived whenever possible. We can also coordinate the appraisal for you to make the process convenient and quick – often helping speed up your refinance so you get your funds or lower rate faster.
Most prime lenders (major banks, etc.) do not charge any separate administrative fees or origination fees for a standard refinance. Their costs are covered by the interest you’ll pay on the new mortgage. However, if you are using a non-traditional lender – for example, a “B” lender or private lender (perhaps due to credit challenges or unique income situations) – there could be some lender or broker fees. These can range widely, from 0.5% to 1% (or more) of the loan amount, depending on the situation and what was negotiated.
At Turkin Mortgage, we are transparent about any such fees from the start. In the vast majority of cases, our clients refinancing with mainstream lenders pay no lender or broker fees out of pocket. Our brokerage is typically compensated by the lender. Only in special cases (which we would discuss and get your agreement) would a fee be applicable. Rest assured, our mission is to find you the best refinancing deal among our network of lenders – one that minimizes costs and maximizes your savings. You’ll have full clarity on what your refinance will cost, and why.
Title Insurance Update: In some refinances, your lawyer might recommend or require an update to your title insurance or a new policy if you didn’t have one. This is usually minor if at all, since your original owner’s title insurance remains in effect. Sometimes a new lender may want a lender’s title insurance policy to specifically cover their interest. This cost would be relatively small (similar range $200-$300) and often is included in the legal/disbursement fees if needed.
Mortgage Default Insurance on Refinance: Generally, if your original mortgage was high-ratio and insured, that insurance stays with the mortgage (and even if you move lenders, the insurance can often be ported or the new lender benefits from it). If you are refinancing to pull out equity, by law you can only refinance up to 80% of your home’s value if it’s uninsured. There are some exceptions where one might refinance above 80% with a new insured loan, but that would mean paying a new insurance premium on the new money – this is not common and has to be arranged specifically. Most people refinancing will be at 80% loan-to-value or less, meaning no new CMHC premium. Thus, usually no new insurance cost in a refinance except the possible title insurance mentioned above.
Time and Effort: While not a fee, remember that refinancing does take some effort – paperwork, income verification, etc., similar to getting a new mortgage. Working with a brokerage like Turkin Mortgage can significantly reduce the hassle. We handle the rate shopping, paperwork gathering, and coordination with the lawyer, making your refinance as smooth as possible. We strive to close your refinance loan quickly and efficiently, so you can start benefiting from it immediately.
By understanding these refinance costs, you can make an informed decision about whether refinancing makes sense for you right now. Often, homeowners find that the long-term savings (or short-term cash access) from a refinance far outweigh the one-time costs. We at Turkin Mortgage will help you crunch the numbers to be sure. Your financial well-being is our top concern, so if refinancing isn’t beneficial after accounting for costs, we’ll advise you of that just as honestly as we would recommend a refinance that does save you money.
You might be wondering, “Do I really need to calculate all these fees beforehand?” The answer is absolutely, yes. Here’s why estimating your home purchase or refinance costs in advance is so crucial:
Accurate Budgeting: Knowing the full picture of costs lets you budget accurately. When buying a home, you’ll need to ensure you have enough savings to cover your down payment plus all closing costs. If you don’t plan for the $15,000 (for example) in taxes and fees that come with a purchase, you could be caught short on closing day. By estimating ahead of time, you’ll set aside the right amount and avoid scrambling for funds.
Avoiding Surprises: No one likes to be blindsided by unexpected expenses. Moving into a new home or changing your mortgage should be a celebratory experience, not a stressful one. When you use our calculator and guidance, you’ll walk into closing day fully prepared – no surprises, no stress. This peace of mind is invaluable.
Decision Making: For refinances, an estimate of costs helps you decide if it’s the right move. For instance, if you learn that refinancing will cost $3,000 in fees but will save you $10,000 in interest, the decision is easy. Conversely, if the savings are small but the penalty is large, you might decide to wait. Having the numbers in hand enables you to make a confident, informed decision about whether to buy now, refinance now, or perhaps adjust your plans (like saving a bit more down payment to avoid certain fees).
Negotiating Power: When you know your expected costs, you can also negotiate better. If you’re aware that, say, legal fees will be $1,500, you could potentially ask a seller (in a home purchase) to cover some cost as part of the offer, or ask your lender or broker if they have programs to cover that. Turkin Mortgage, for example, has programs to cover legal fees or provide cash back – an informed client can take advantage of these and save hundreds or thousands of dollars.
Confidence and Timing: Understanding the cost breakdown gives you confidence to proceed. You won’t be thinking “What if I can’t afford something at the last minute?” You’ll already know you can. This confidence also helps with timing – if you see the cash requirement is a bit high, you might push your timeline a month or two to save up, rather than rushing in unprepared. Or, if everything looks good, you can proceed to make an offer or start a refinance with full steam, knowing you’ve got everything covered.
In short, estimating costs upfront turns an unknown into a known. At Turkin Mortgage, our philosophy is that an educated client is a happy client. We empower you with knowledge of exactly what to expect, so the process of buying or refinancing is smooth. Use our calculator, talk to our advisors, and you’ll move forward with clarity. No surprises, just results.
Understanding your purchase and refinance costs is the first step. Now, let’s put that knowledge into action and get you the best deal on your mortgage. Turkin Mortgage is here to make your home financing journey simple, fast, and affordable. What’s next for you?
1. Get Pre-Approved or Discuss Your Options: If you’re looking to buy a home, a mortgage pre-approval is a smart next step. We can lock in a great rate for you and determine your maximum purchase price including estimated closing costs, so you know your budget. If you’re looking to refinance, our team can review your current mortgage and goals to confirm how much you can save and what the costs would be. Our advice is personalized – we take into account your unique situation and we’ll walk you through the numbers in plain language.
2. Leverage Our Expertise to Save Money: When you work with Turkin Mortgage, you’re not just getting a loan – you’re gaining a partner. We shop around with dozens of lenders across Ontario to find you the lowest interest rates and the most favorable terms. We also negotiate on your behalf. For example, we often secure deals where the lender covers your appraisal or legal fees, or we get you cash back on closing (we have promotions like covering up to $1,000 of legal costs or giving $1,000 cash back when you close with us). These perks can offset a big chunk of your closing costs, effectively putting money back in your pocket. Our goal is to save you as much as possible while meeting your financing needs.
3. Fast, Smooth Approval Process: We pride ourselves on a fast-paced, efficient process. Once you’re ready to proceed (with a purchase or refinance), we handle the heavy lifting to get your mortgage approved quickly. We’ll guide you through the paperwork, help you satisfy any lender conditions, and coordinate with lawyers and other parties. Because we’ve already estimated your costs, nothing will catch us off guard. Turkin Mortgage brokers have a reputation for closing on time, headache-free. We know every day counts, whether you’re eager to get the keys to your new home or to start saving on interest with your refinance.
4. Ongoing Support: Even after your mortgage closes, we’re here for you. Have questions about payments or future plans? Need advice on your next financial move? We provide ongoing support and mortgage management tips. Our clients aren’t just transactions to us – they’re lifelong relationships. That’s why we have so many happy homebuyers and homeowners across Ontario who trust Turkin Mortgage for all their mortgage needs.
Ready to take the next step? Contact Turkin Mortgage today to speak with a friendly mortgage expert. We’ll happily answer any questions about your home purchase or refinance costs, and guide you through the next steps to turn your homeownership goals into reality. With the right planning and the right team behind you, buying or refinancing a home can be a smooth, rewarding experience. Let’s make it happen for you!
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Closing costs when buying a home in Ontario generally range from about 1.5% to 4% of the purchase price of the property. The exact amount varies based on the price of the home and your specific situation. Key components of these closing costs include the land transfer tax, legal fees, title insurance, and potentially adjustments for taxes/utilities. For example, on a $600,000 home, you might expect total closing costs in the ballpark of $12,000–$18,000. It’s important to remember these costs are on top of your down payment. Planning for around 3% of the home price in closing costs is a good rule of thumb for most Ontario buyers (slightly more if the home is in Toronto due to the extra land transfer tax). Our calculator and breakdown above give more detailed insight into each item, so you can refine that estimate based on your circumstances.
Ontario’s land transfer tax (LTT) is calculated on a tiered system based on the purchase price of the property. The rates are: 0.5% on the first $55,000, 1% on the amount from $55,000 to $250,000, 1.5% on $250,000 to $400,000, 2% on $400,000 up to $2 million, and 2.5% on any portion above $2 million (for residential one-to-two family homes). To calculate it, you apply each rate to the portion of the price that falls in that bracket and then sum them up. For example, for a $500,000 home:
0.5% on $55,000 = $275
1% on the next $195,000 (up to $250k) = $1,950
1.5% on the next $150,000 (up to $400k) = $2,250
2% on the remaining $100,000 (from $400k to $500k) = $2,000
Add those up, and the total LTT would be $6,475. If the property is in Toronto, a second, equal municipal LTT would apply, effectively doubling that amount (though first-time buyers get rebates, see next question). Our calculator can compute the LTT for you automatically when you input the home price and specify if you’re a first-time buyer and/or buying in Toronto.
Yes, first-time homebuyers are eligible for some savings on closing costs, particularly on the land transfer tax. In Ontario, a first-time buyer can receive a land transfer tax rebate of up to $4,000 on the provincial LTT. This means if your calculated LTT is $4,000 or less, you would pay $0 (the rebate covers it). If your LTT is above $4,000, you’d only pay the amount beyond $4,000. For example, if your Ontario LTT comes to $6,475 (on that $500k home, as above), a first-time buyer would get $4,000 off and only pay $2,475.
For those buying in Toronto who are first-time buyers, there is an additional rebate on the municipal LTT (up to roughly $4,475). Combined, a first-time buyer in Toronto can save a significant amount on land transfer taxes. Other than LTT, first-time buyers don’t get automatic “discounts” on things like legal fees or inspections (those cost the same), but there are other programs to help first-timers, like the First-Time Home Buyers’ Tax Credit (a $750 federal tax credit). Also, some lenders or brokers have special offers for first-time buyers – for instance, Turkin Mortgage frequently provides extra guidance and sometimes promotions (like covering legal fees) for our first-time buyer clients to help ease the financial burden. Always ask what programs or deals might be available to you as a first-time buyer.
The cost to refinance a mortgage in Ontario can typically range from around $1,000 to $3,000 or more, depending on your situation. The main costs to consider are:
Mortgage penalty: If you’re breaking your current mortgage before the term is up, the penalty could be a significant cost (often 3 months’ interest or an interest differential – which could be $1,000 to several thousand dollars based on your rate and balance). If you refinance at the end of the term, this cost is $0.
Legal fees: Expect roughly $800 to $1,000 for a lawyer to handle the refinance paperwork and title registration.
Discharge fee: About $200-$300 payable to your old lender to close out that mortgage.
Appraisal fee: Around $300-$500 if required by the new lender (though sometimes this is waived or covered by the lender).
Title insurance or misc: Possibly a couple of hundred dollars if a new lender’s title insurance policy is needed, or other small admin costs.
In many refinance cases, the new lender will cover some of these costs, especially if you’re a strong client (good credit, sizable loan). For example, a lender might offer to pay your legal fees or appraisal to entice you to switch to them. At Turkin Mortgage, we often secure “no-cost” refinance deals for our clients where the lender covers the legal and appraisal, leaving you mainly with just a discharge fee and any penalty to consider. Every case is a bit different, so it’s best to have us review your mortgage – we’ll give you a clear breakdown of what your refinance would cost (and how much you’d save, so you see the net benefit).
No. Land transfer tax is only paid when a property is changing ownership. When you refinance your mortgage, you are not purchasing the property or changing who owns it – you’re simply changing the loan on the property. Therefore, no land transfer tax applies to a refinance in Ontario (or anywhere in Canada). Land transfer taxes are one-time taxes paid at the time of purchase of real estate. If you already paid it when you bought your home, refinancing later doesn’t trigger another tax since there’s no transfer of title to a new owner. This is an important distinction: refinance = new debt, not a property sale.
So, when calculating refinance costs, you can safely exclude land transfer taxes. You will focus on the other costs (legal, possible penalty, etc.) we discussed in the breakdown above. This is good news because it means refinancing is generally much cheaper than buying, in terms of fees. Many people ask this question, and we’re happy to reassure you that no, you won’t face the thousands in land transfer taxes again just to refinance.
Everyone loves saving money, especially on big transactions like a home purchase or refinance. Here are several ways you can reduce your closing costs or have others help pay them:
Work with a mortgage broker: A broker like Turkin Mortgage can often get lenders to cover certain costs as part of the deal. We’ve mentioned that many lenders will pay for your appraisal or legal fees on a refinance. Even on purchases, some lenders offer cash-back deals that effectively can offset your closing costs. We know where to find these offers. Plus, our own Turkin Mortgage promotions (such as paying up to $1,000 of your legal fees, or providing cash back) directly put money back in your pocket.
Plan for first-time buyer rebates: If you’re a first-time homebuyer, make sure you claim the land transfer tax rebate. That’s up to $4,000 (Ontario) and possibly another ~$4,000 (Toronto) saved instantly. We handle the paperwork for this alongside your lawyer. Also, file for the First-Time Home Buyer tax credit when you do your taxes to get an extra $750 back.
Shop around for services: You have the right to choose your lawyer, home inspector, and insurance provider. By shopping around, you might find a better rate. For example, some lawyers offer package deals for first-time buyers, or you might get a discount if you use a law firm recommended by your realtor or broker. Just ensure that whoever you choose is reputable – savings shouldn’t come at the expense of quality. Turkin Mortgage has a network of trusted professionals we can refer you to, often at preferred rates.
Close near the end of the month: This can slightly reduce your interest adjustment costs or the amount of prepaid interest you pay on a new mortgage. It might also minimize the property tax adjustment if the seller has paid for the whole month and you only owe for a couple of days. This isn’t a huge saving, but every bit counts.
Refinance at term-end: As noted, if you wait until your mortgage term is complete (maturity) to refinance or switch lenders, you avoid the penalty. This can save thousands. Sometimes it’s worth waiting a few months for that date to avoid the fee. We can help you time things optimally.
Increase your down payment (if possible): If you’re close to the 20% down payment mark, adding a bit more can save you from the CMHC insurance premium altogether, which is a big cost (even if it’s rolled into the loan, it’s extra debt). Also, a slightly higher down payment could reduce your land transfer tax if it brings your purchase price down or if you negotiate a slight price reduction in lieu of something – though price is usually fixed, but you could negotiate the seller to cover a closing cost instead of price.
Negotiate with the seller: In slower real estate markets, buyers sometimes can ask sellers to cover certain closing costs as part of the offer (this is more common in the U.S., but in Canada it’s less typical to have explicit seller-paid closing costs). However, a seller might be more willing to, say, pay for your title insurance or include an allowance for repairs that you can use (effectively reducing your costs after closing).
Ultimately, the best way to save on costs is to be informed and use the resources available. That’s where we come in – Turkin Mortgage will make sure you’re aware of all saving opportunities. We treat your money like our own, and we fight hard to keep your costs low. The combination of our expertise, lender connections, and personalized advice means you won’t pay a penny more than necessary. We’ve had clients save thousands through lender credits and smart planning. Your success is our success, so count on us to help you find every possible way to save on your home purchase or refinance.
By taking advantage of tools like our calculator and partnering with an experienced team like Turkin Mortgage, you’ll navigate the home buying or refinancing process with confidence and ease. If you have more questions or are ready to move forward, get in touch with us anytime – we’re here to help you achieve your homeownership goals while keeping your hard-earned money working for you. Here’s to a smooth and cost-effective closing on your new purchase or refinance!
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