How much cash do I actually need on closing day?
Your down payment plus closing costs, which this app's own estimate puts at roughly one and a half to three percent of the price outside Toronto and above four percent inside it, because Toronto charges a second land transfer tax.
The lines, in rough order of size: provincial land transfer tax, municipal land transfer tax if the property is in Toronto, legal fees and disbursements, title insurance, the Ontario retail sales tax on mortgage insurance if your down payment is under twenty percent, the property tax adjustment reimbursing the seller for the part of the year they prepaid, and the home inspection and appraisal which you paid earlier.
Two of these are the ones people miss. The Toronto municipal land transfer tax roughly doubles the largest single line. And the sales tax on the mortgage insurance premium cannot be added to the loan the way the premium itself is, so it is cash.
Then there is money that is not a closing cost but is due around the same time: movers, the first year of home insurance, utility deposits, and a reserve. Closing with nothing left is how a good purchase turns into a bad year.
Run your own numbers. Your lawyer's statement of adjustments is the authoritative figure, and you want your own estimate first so you can question theirs.
What it depends on
- whether the property is inside the City of Toronto
- whether you qualify for the first-time buyer rebates
- whether your mortgage is insured
- your closing date, which sizes the property tax adjustment
Answer it with your own numbers
You will need: purchase price, down payment, municipality, closing date.
Itemize your own cash to closeAlso asked as
- What are closing costs in Ontario?
- How much are closing costs in Toronto?
Next questions
What is land transfer tax and how much will I pay?
A provincial tax on the purchase price, charged at marginal rates that rise with price and paid by your lawyer on registration. Inside the City of Toronto a second municipal tax applies on top, which at ordinary prices is close to the provincial amount and at high prices is more.
Ontario
Why do I have to pay sales tax on my mortgage insurance in cash?
Because Ontario taxes the insurance premium, and while the premium itself is added to your mortgage, the tax on it cannot be. It is due in cash on closing and it is the line buyers most often discover late.
Ontario
What is a statement of adjustments?
Your lawyer's final accounting of the transaction: purchase price, credit for your deposit, the mortgage advance, adjustments for anything the seller prepaid, and the exact balance you must deliver. Read every line before you sign it.
Ontario