What closing costs do first-time buyers pay?

Common closing costs include legal fees, prepaid taxes, adjustments, land transfer tax, title insurance, appraisal fees, and lender costs.

How much are typical closing costs?

Closing costs usually range from 2% to 5% of the home's purchase price depending on the province, property type, and lender requirements.

Can closing costs be included in the mortgage?

Some lenders allow rolling certain costs into the mortgage depending on the loan type, property value, and provincial rules.

First-Time Buyer Closing Costs Explained

20 November 2025 By: Devon Jones0 comments

The Hidden Costs of Homeownership — Explained Clearly

Buying your first home is an exciting milestone – but many first-time buyers are surprised by the additional expenses that come just before move-in day. In First-Time Buyer Closing Costs Explained, we break down exactly what these fees look like, why they vary, and how much you should expect to set aside. These closing costs can add up to 2–5% of your home’s purchase price, depending on your location and property type. Understanding them early helps you plan realistically and avoid last-minute stress.

At Sunlite Mortgage, we believe clarity is power. That’s why we walk every buyer through these costs before they make an offer – so there are no surprises on closing day.

Mortgage Term: Closing Costs Explained

Closing Costs: The total of fees and expenses due upon finalizing a real estate purchase – including legal, tax, and lender-related charges.

Common Closing Costs for First-Time Buyers

Here’s a breakdown of what you can expect:

1. Legal Fees & Disbursements

a. Your lawyer reviews contracts, registers the mortgage, and ensures title transfer accuracy.
b. Typical cost: $695.00 to $895.00.

2. Land Transfer Tax (LTT)

a. A provincial or municipal tax based on property value.
b. Ontario, BC, and Toronto offer first-time buyer rebates that can save thousands.

3. Title Insurance

a. Protects against ownership disputes or fraud.
b. Typically $250–$400.

4. Home Inspection

a. Not required but strongly recommended — usually $400–$600.

5. Appraisal Fee

a. Sometimes required by lenders to confirm property value ($300–$500).

6. Property Tax and Utility Adjustments

a. You may need to reimburse the seller for prepaid property taxes or utilities.

7. CMHC Insurance Premium (if <20% down)

a. Often added to your mortgage, but should be budgeted for upfront awareness.

Example: Planning for a Smooth Closing

A first-time buyer in Edmonton purchased a $500,000 condo and paid about $10,500 in total closing costs – but qualified for the first-time buyer rebate, saving $4,000 in land transfer tax.

Budgeting Tips for Success

Estimate 3–4% of your purchase price as a safety margin.
Ask your broker to review which fees are fixed and which are variable.
Keep a small emergency fund for moving costs or immediate repairs.

Common Mistakes to Avoid

Making large purchases or opening new credit cards before closing
Assuming pre-approval = guaranteed funding (it’s conditional)
Failing to update documents if months pass before buying
Not understanding the mortgage stress test

The Sunlite Mortgage Advantage

We simplify your homebuying costs by outlining every potential fee upfront, then helping you identify savings opportunities through rebates or credits.

Want a clear estimate of your full cost to close? Contact Sunlite Mortgage for a personalized breakdown before you buy.

Closing Thought

The final steps of homebuying shouldn’t be stressful.

With expert guidance from Sunlite Mortgage, you’ll walk into your new home with confidence — knowing exactly where every dollar went.