Closing Costs

Closing Costs


Closing costs are the fees associated with the purchase of your home that is in addition to the actual purchase price, such as legal fees and disbursements, land transfer taxes and moving expenses. Please note that for CMHC (Canada Mortgage and Housing Corporation) and Genworth Financial Canada insured mortgages, you must provide evidence of available cash for closing costs equal to 1.5% of the purchase price. This is a standard calculation and the lawyer or notary you use will determine final/exact closing costs.


This tax is payable on the purchase of all real property in B.C. The calculation is based on 1% of the purchase price up to $200,000 and 2% of any amount above $200,000. Most first time buyers are exempt from this if they meet certain criteria and always confirm with the lawyer you are using for the purchase. The main criteria are:

  • Borrower has never owned a principal residence anywhere in the world
    Maximum purchase price of $475,000; partial exemptions available to $500,000
  • Must be a Canadian citizen or permanent resident, and residing in B.C. for a minimum of 12 months


Legal representation will cost you approximately $1,100 for a purchase and a mortgage, add another $900 if you are selling a property at the same time.


The interest adjustment date is the date from which your lender actually starts calculating the interest you’ll pay. It’s basically the date on which the term of your mortgage really begins. Interest adjustment generally takes place on the 1st day of the month after the completion date. For example, if your completion date is June 20th and you choose the monthly payment frequency option please see dates:

  • Completion date is June 20th
  • Interest adjustment date is July 1st
  • First full payment date is August 1st


A bank will either require title insurance or a survey certificate. The majority of banks are now requiring title insurance and the lawyer or notary you choose will be able to explain the differences and go over pricing.


The property is evaluated by a professional appraiser to determine the market value of the property. This is done on conventional mortgages (down payment is 20% or greater, private transactions and properties to be used for investment purposes. This is to ensure that:

  • The lending institution is not over lending on the property and;
  • To protect the borrower from over-paying. Generally, a standard residential appraisal will cost $275.


An inspection is a thorough evaluation of the structure, systems and components of a home. The inspection report is usually multi-paged, and comments on the condition of, but not limited to foundations, electrical, plumbing, heating, water heaters, appliances, fireplaces, drainage, roof, walls, floors, attic, crawl spaces, patios, etc. This report is for the sole benefit of the buyer and is not required by the bank.


Generally, property taxes for the calendar year are paid at the beginning of July. If you purchase a property before July 1st, the seller will be paying you for the days they owned the home from January 1st to the completion date.

You then are responsible for the entire amount to be paid to the municipality on July 1st.

If you purchase a property after July 1st, you will pay the seller for the days you own the property from completion day to December 31st, as they will already have paid the entire amount to the municipality on July 1st.

To calculate this amount: one day’s taxes on owner-occupied properties are the annual taxes, less $570 (estimate) home owner grant, divided by 365.


This is a requirement by the bank to ensure that the borrower has arranged sufficient insurance to cover any losses that may be incurred on the purchase. Proof of coverage by way of an insurance binder supplied by the insurance agent is necessary and usually costs $35.


The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the home will be rebuilt to a standard that ensures the bank’s collateral is not in jeopardy. Fire insurance is normally applicable to only houses and not strata units (ie townhouses and condos).

PLEASE NOTE: Lenders will want proof that you have at least 1.5% of the purchase price for closing costs. This is not how much they will actually be, but rather a generic estimate. Every home will have different costs associated with purchasing it.


Please contact Key Momentum Mortgages Ltd.  directly for estimates on the items below:

  • Deposit - Paid to you Realtor usually upon acceptance or subject removal
  • Down Payment - Paid on closing date with lawyer. Minimum 5%.
  • Default Insurance
  • Property Tax Adjustment – Calculated by your lawyer/notary at completion
  • Property Tax Hold-back – If the lender is paying the property taxes on your behalf, they may require a lump sum at closing to start the property tax account
  • Utility Transfer fees – BC Gas, Hydro, Telephone, Cable
  • Property Transfer Tax - Refer to your lawyer for details. Currently 1% on the first $200,000 and 2% on the remainder -First Time Home Buyers may be exempt as well as purchasers of some newly built homes
  • Appraisal Fees – May be required. The purpose is to confirm the value and condition of the home
  • Home Inspection -Not generally a lender requirement, but strongly recommended. If deficiencies are found and a price reduction occurs, the lender may request a copy.
  • Land Survey or - Not generally a lender requirement, but strongly recommended. If deficiencies are found and a price reduction occurs, the lender may request a copy.
  • House Insurance - You will be required to arrange adequate house insurance to cover the value of your home with “loss payable” to the lender. The replacement value typically has to be supported by the purchase price.
  • Strata-titled properties are typically covered under the Strata Corporation blanket policy however further insurance may be required.
  • Legal Fees - A lawyer or notary will charge you professional and disbursement fees for conducting various title searches, preparing and registering the mortgage.
  • Life Insurance - Life insurance and/or creditor insurance is not required however it is strongly recommended that you have some type of coverage
  • Closing Adjustments - You should expect some closing adjustments for bills that the seller has prepaid such as property taxes and utility bills. This will be settled at the time of closing by your lawyer/notary.
  • GST – For confirmation ask realtor.
  • Other ___________________________________


* Closing costs are estimated only and may be higher or lower than estimated. Please contact your lawyer/notary to verify.


The information and services offered on this site are provided with the understanding that no one is engaged in rendering legal or other professional services or advice directly from this website. Although we strive for accuracy, timeliness and completeness, information quoted is not guaranteed and may change at any time and the information you obtain at this site is not, nor is it intended to be, legal advice. If you require specific advice regarding your own financial situation please contact Key Momentum Mortgages Ltd. for consultation.