Understanding Closing Costs in 2025: What Buyers and Sellers Need to Know

When buying or selling a home in 2025, most people focus on the big numbers—sale price, mortgage rates, and monthly payments. But what often catches people off guard are the closing costs—those essential (and sometimes overlooked) fees that are due at the end of the transaction.

Whether you're a first-time homebuyer or a seasoned seller, understanding closing costs is crucial for budgeting properly and avoiding last-minute surprises.

This comprehensive guide breaks down the typical closing costs in Ontario in 2025—for both buyers and sellers—so you can move forward with confidence.

What Are Closing Costs?

Closing costs are the final set of fees, taxes, and adjustments that must be paid when a real estate transaction is completed. They’re separate from your down payment and are usually due on the closing day—the day the property legally changes hands.

These costs can vary widely based on location, purchase price, financing, and property type—but they typically range from 1.5% to 4% of the purchase price for buyers and include several deductions for sellers.

Buyer Closing Costs in 2025

If you're purchasing a home in Ontario, here’s a breakdown of the common closing costs to expect:

1. Land Transfer Tax (LTT)

One of the largest closing costs for buyers. It’s based on a percentage of the home’s purchase price.

• Ontario Land Transfer Tax: Applies province-wide

• Toronto Land Transfer Tax: Additional tax if buying in the City of Toronto

• First-Time Buyer Rebate: Up to $4,000 (Ontario) or $4,475 (Toronto) for eligible buyers

📌 Example:
On a $750,000 home in Ontario (not in Toronto), LTT = ~$11,475 before rebates.

2. Legal Fees and Disbursements

A real estate lawyer is required to complete your purchase. They’ll handle title searches, register the property, and manage funds.

• Typical cost: $1,500–$2,000+ (including taxes and disbursements)

3. Title Insurance

Protects against issues with the property’s ownership or title. It’s usually a one-time premium.

• Cost: $250–$500, depending on the home price and insurer

4. Home Inspection (Pre-Closing)

Though optional, it’s highly recommended to identify any issues before closing.

• Cost: $400–$700

5. Appraisal Fee

If you're getting a mortgage, the lender may require an appraisal.

• Cost: $350–$500

6. CMHC Insurance (If Applicable)

If your down payment is less than 20%, your mortgage will include insurance—this is added to your loan, but you'll pay PST (8%) on it upfront.

• Example: $12,000 CMHC premium = $960 PST due at closing

7. Adjustments

You may need to reimburse the seller for prepaid property taxes, utilities, or condo fees (if applicable).

• Cost: Varies, but budget $500–$2,000+

Seller Closing Costs in 2025

Sellers also incur costs when closing a sale. While they don’t pay land transfer tax, they are responsible for several key expenses:

1. Real Estate Commission

Typically the largest seller expense, paid from the proceeds of the sale.

• Standard in Ontario: 5% of sale price + HST (negotiable)

• Example: On a $900,000 sale = ~$45,000 + HST = $50,850

2. Legal Fees

Lawyer fees for discharging your mortgage, preparing closing documents, and handling proceeds.

• Cost: $1,200–$1,800+

3. Mortgage Discharge Fees & Penalties

If you’re breaking your mortgage term, your lender may charge an early payout penalty.

• Cost: Can range from $300 to several thousand depending on term, rate, and lender policy

4. Adjustments

You may receive reimbursement from the buyer for prepaid property tax or utility credits.

Hidden or Unexpected Closing Costs to Be Aware Of

• Status Certificate (Condos): Required by sellers; ~$100

• Estoppel Certificate (Commercial Units): ~$200+

• Moving Costs: Can range from $500–$2,500+ depending on distance

• Utility Hook-Up/Disconnection Fees: $50–$200+ per service

• Home Insurance: Buyers need it in place before closing

• Property Survey (if requested): $1,000+ for rural or custom properties

How to Prepare for Closing Costs in 2025

Here are key tips for buyers and sellers to stay ahead of the financial curve:

✅ Ask for a Cost Estimate Early

Whether you’re buying or selling, your lawyer and agent can provide an estimated breakdown of closing costs based on your situation.

✅ Don’t Rely Solely on Your Down Payment

Many buyers are surprised to learn they need additional cash on hand for closing—separate from the mortgage and deposit.

✅ Use a Trusted Real Estate Lawyer

They will walk you through adjustments, disbursements, and legal paperwork to avoid errors and delays.

✅ Get Pre-Qualified with Closing Costs in Mind

Lenders look at the full picture. Make sure you account for all transaction-related fees when determining your affordability.

Final Thoughts: Closing Costs Are Part of the Bigger Picture

Closing costs are a necessary part of every real estate transaction. While they may seem overwhelming at first, understanding them early can help you avoid last-minute stress and plan your finances properly.

In 2025, both buyers and sellers in Ontario can expect slightly higher costs due to inflation and legal fee adjustments—but with preparation and expert guidance, you can navigate them with ease.

Need Help Estimating Your Closing Costs?

At Ana Bastas Realty, we guide buyers and sellers through every financial detail of their transaction—including closing costs, lender recommendations, and legal referrals.

Serving clients in Halton Hills, Georgetown, Oakville, Burlington, Mississauga, Hamilton, and across the GTA since 2012, we’re here to make sure you close with confidence.

📞 Call/Text: 647.938.8814
🌐 www.anabastas.ca
📍 Certified: ABR | SRS | SRES | RENE