What Do Closing Costs Include and How Much Should You Expect?
If you’re buying a home, especially for the first time, you’ve probably been told to save for your down payment. But that’s not the only financial hurdle to clear. Have you asked yourself: How much are closing costs for a house? Whether you’re purchasing a condo in downtown Mississauga or a detached home in Port Credit, understanding closing costs is crucial to avoid last-minute surprises and to budget properly.
Many homebuyers mistakenly believe the home price and mortgage are the only major expenses. In reality, closing costs can amount to 2% to 5% of the purchase price, depending on several factors like location, legal services, mortgage terms, and more (Canada Mortgage and Housing Corporation, CMHC). Yet, few buyers truly understand what these fees include—or how to negotiate or reduce them. That’s where a trusted real estate broker in Mississauga becomes your best ally.
In this guide, we’ll dive deep into what closing costs really are, why they matter, and what most websites don’t tell you.
What Are Closing Costs?
Closing costs are the various legal, administrative, and financial fees that must be settled when a property transaction is finalized. These costs are in addition to the price of the home and your mortgage. Buyers are usually responsible for most of them, though sellers incur some as well.
For those exploring Mississauga homes, where the average price in early 2025 is hovering around $975,000, closing costs could range between $19,500 and $48,750—a substantial sum if you haven’t budgeted for it.
Common Closing Cost Components
Let’s break down what you can expect to pay during closing.
1. Land Transfer Tax (LTT)
This is one of the largest fees and is based on your home’s purchase price. Ontario’s LTT is tiered, and homes in cities like Toronto also have a municipal LTT—but Mississauga residents are exempt from that second layer, which can save you thousands.
For a $975,000 home:
- Ontario LTT: approximately $14,475
First-time homebuyers may qualify for a rebate of up to $4,000, softening the blow.
2. Legal Fees
You’ll need a real estate lawyer to handle the title transfer, conduct a title search, and register the property. Fees typically range between $1,200 and $2,000, depending on complexity and the lawyer’s rates.
3. Title Insurance
This protects against fraud, errors in public records, and encroachments. It’s optional but highly recommended and often required by lenders. Expect to pay $250–$500.
4. Home Inspection Fee
While not legally required, this is a vital safeguard, especially for older Mississauga homes. A professional inspection costs $300–$600, depending on home size and complexity.
5. Appraisal Fee
Your lender may require a home appraisal to confirm its value before approving your mortgage. The cost? Usually $350–$500.
6. Property Tax and Utility Adjustments
If the seller prepaid property taxes or utilities, you’ll need to reimburse them for the prorated portion. This can be a few hundred to a few thousand dollars, depending on the timing of your purchase.
7. CMHC Insurance Premium (if applicable)
If your down payment is less than 20%, mortgage default insurance is mandatory and usually added to your mortgage. However, the provincial sales tax (PST) on the premium must be paid upfront, potentially adding $1,500–$3,000 to your closing costs.
Beware of These Often Overlooked Closing Costs
Some expenses are routinely left out of online guides. But savvy homebuyers (and real estate professionals) know to account for them:
1. Prepaid Interest
If your mortgage starts mid-month, you might owe interest for the days before your first regular payment.
2. Courier and Wire Transfer Fees
Lawyers and lenders may charge these small, but unavoidable, administrative fees. They typically total $50–$150.
3. Disbursements
Lawyers pass along costs they incur on your behalf, like title searches, document preparation, and registration fees. These can add up to $300–$500.
4. GST/HST on New Builds
If you’re buying a newly constructed home, you may owe 13% HST in Ontario—unless it’s included in the purchase price. Builders may apply for a rebate on your behalf, but any portion not covered could cost you thousands.
5. Status Certificate (for condos)
If you’re purchasing a condo, you’ll need a status certificate to verify the financial health of the building and any legal issues. It costs $100–$150 and is essential for due diligence.
How Much Should You Expect to Pay?
As mentioned, closing costs typically run 2%–5% of the home’s purchase price. For reference:
| Home Price | Estimated Closing Costs (2%–5%) |
| $500,000 | $10,000 – $25,000 |
| $750,000 | $15,000 – $37,500 |
| $975,000 | $19,500 – $48,750 |
Your final amount depends on:
- Whether you’re a first-time buyer
- The location (Mississauga vs. Toronto)
- Property type (resale vs. new build)
- Mortgage size and insurance needs
Are Closing Costs Negotiable in the Canadian Real Estate Market?
Yes—and no. Some costs are non-negotiable, like land transfer taxes and insurance premiums. But others can be reduced or eliminated with the right guidance.
Here’s what you can negotiate:
- Legal fees: Some lawyers offer flat-rate deals or first-time buyer discounts.
- Inspection and appraisal costs: Get multiple quotes and ask your real estate agent for trusted referrals.
- Lender fees: Depending on your financial profile, some lenders may waive application or processing fees.
- Seller concessions: Skilled negotiators can sometimes get the seller to cover part of the closing costs, especially in a buyer’s market.
A seasoned real estate broker, like our Real Estate Broker Mississauga expert, can help identify negotiable items and advocate for your interests throughout the deal.
How to Prepare for Closing Costs
Avoid surprises by taking these proactive steps:
- Get a Detailed Estimate Upfront
Ask your lender and lawyer for a closing cost breakdown early in the process. - Read the Fine Print
Don’t gloss over your mortgage documents. Know when fees are due and how much they are. - Set Aside Extra Funds
Budget more than the estimated 5% if you’re buying a new build or condo, as additional fees often sneak in. - Partner with the Right Agent
Your real estate agent should guide you through these costs and help you find trusted professionals—lawyers, inspectors, appraisers—so you don’t overpay.
The Real Estate Broker Mississauga Advantage
Navigating the housing market in Mississauga can be complex, but also rewarding. From vibrant neighborhoods like Streetsville to lakefront gems in Clarkson, the city offers a diverse selection of properties. Yet each comes with its own set of closing costs, risks, and opportunities.
That’s why working with a Real Estate Broker Mississauga professional isn’t just convenient—it’s smart. We understand the local market nuances, can connect you with vetted service providers, and help you save money through negotiation and experience.
Wrapping It Up
Closing costs are an unavoidable part of any real estate transaction, but they don’t have to be confusing or financially overwhelming. Knowing what to expect, preparing ahead of time, and working with the right experts can save you thousands and reduce stress as you transition into homeownership.
Ready to Find Your Dream Home in Mississauga?
Whether you’re a first-time buyer or moving up the property ladder, don’t navigate the process alone. Our Real Estate Broker Mississauga team is here to guide you every step of the way—from finding the right home to minimizing closing costs. We’ll help you understand your total budget, avoid hidden fees, and make confident decisions. Contact us today for a personalized consultation. Let’s turn your real estate goals into reality.
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