Costs and closing
Closing costs
The cash you need on possession day on top of the down payment, including legal fees, registration fees, adjustments, insurance and inspections.
Closing costs are the part of a purchase you can't finance, which is why they stop more deals than the mortgage does. In Alberta they're unusually low, and national guides often overstate them.
The typical Alberta list: legal fees and disbursements of $1,200 to $2,000; Land Titles registration fees of $50 plus $5 per $5,000 of value on both the transfer and the mortgage; title insurance of $250 to $400; a home inspection of $400 to $700; an appraisal if the lender orders one; and property tax and utility adjustments to the seller.
Two costs are missing from that list. Alberta charges no land transfer tax, and no provincial sales tax on a default insurance premium. In Ontario, those 2 items alone would add several thousand dollars in cash.
Budget about 1.5% of the purchase price in Alberta. National articles that suggest 3 to 4% are based on provinces with a land transfer tax.
Related terms
Land transfer tax
A provincial tax on property purchases in most of Canada. Alberta doesn't charge one.
Land Titles registration fee
Alberta's registration charge in place of a land transfer tax: $50 plus $5 per $5,000 of value, on both the transfer and the mortgage.
Mortgage default insurance
Insurance that protects the lender if you default, required with less than 20% down and paid for by you.
This definition describes how the term is used in Canadian residential mortgage lending. It’s general information, not advice on your file. Rules, thresholds and rates change. Where a figure is quoted, it’s current as of the date shown on the related guide.
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