The down payment gets most of the attention when buyers save, even though it's only part of what you'll need on closing day. The rest catches people off guard more than almost anything else in the process.
The rule of thumb
A common guideline is to budget roughly 1.5% to 4% of the purchase price for closing costs, on top of your down payment. On a $600,000 home, that works out to somewhere between $9,000 and $24,000. Where you land in that range depends mostly on your legal fees, the adjustments and whether you qualify for any rebates.
Land transfer tax
Ontario charges a provincial land transfer tax on every home purchase, calculated on a sliding scale based on the price. Unlike Toronto, Ottawa doesn't add a municipal land transfer tax on top of it, so buyers here only pay the provincial one.
First-time buyers may also qualify for a rebate that takes a real bite out of that cost. It's one of the easiest things to miss, so ask your lawyer to confirm the current amount and whether you qualify.
Legal fees
You'll need a real estate lawyer to handle the closing, review the title and register the transfer. In Ottawa, legal fees typically run somewhere between $1,000 and $2,000, depending on the firm and how complicated the deal is.
Title insurance
Most lawyers will recommend title insurance. It's a one-time cost that protects you against certain title defects or fraud, usually $300 to $800 and often bundled into your legal fees.
Adjustments
On closing day you'll typically reimburse the seller for anything they've prepaid that covers the period after you take possession, like property taxes or utility deposits. It's a normal part of closing, although it's easy to forget about if nobody mentions it before your lawyer sends the final statement.
What else to leave room for
Beyond the closing statement itself, it's worth setting aside a bit more for moving costs, a repair or two that can't wait and furnishing the new place. None of that counts as a closing cost in the technical sense, even though it's real money leaving your account in the same few weeks.
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