Ontario · updated August 2026
How much cash do you need on closing day in Ontario?
Your cash to close is your down payment plus your closing costs, and the second half is what almost everyone underestimates. On a $650,000 purchase with the minimum down, that is about $40,000 down plus roughly $12,000 of closing costs: around $52,000 in the bank the day the keys change hands. Below is every line item, and which ones are Ontario rules rather than national.
The one number that matters
On closing day your lawyer needs one certified payment covering the down payment, land transfer tax, the taxes attached to your mortgage and the adjustments owed to the seller. Short by a few thousand and the deal does not close. Ontario shorthand: whatever your down payment is, add another 1.5% to 2% of the price. Thecalculator itemises it for your numbers, but each piece is worth understanding.
Piece 1: the down payment
Canada sets a sliding minimum: 5% of the first $500,000, plus 10% of everything above it. That is a national rule, not an Ontario one, and it puts the true minimum on most GTA homes well above 5%.
| Purchase price | Minimum down payment | As a percentage |
|---|---|---|
| $500,000 | $25,000 | 5.0% |
| $650,000 | $40,000 | 6.15% |
| $1,000,000 | $75,000 | 7.5% |
| $1,500,000 and above | 20% | 20% |
The $1.5M line matters because mortgage default insurance is only available under that price, so above it 20% down is the floor, not a preference. Below 20% down you have an insured mortgage: the lender is protected by a policy you pay for. See theCMHC insurance guidefor the cost.
Why the minimum is often the right call under 10% down
The insurance premium is a percentage of the loan, and everything from 5% to 9.99% down sits in one flat band at 4.00%. Between the minimum and 10%, an extra $1,000 of down payment shaves only about $40 off a premium that is added to your mortgage anyway, plus about $3 off the tax on it, while that $1,000 has left your account for good. It is not wasted (every dollar down still cuts your loan and its interest), but between scraping to 8% down and keeping a real cash cushion, the cushion usually wins. A full 10% is different: that crosses into a cheaper premium band.
Piece 2: Ontario land transfer tax
Ontario charges a land transfer tax every time property changes hands, and the buyer pays it. It is marginal, like income tax: each band applies only to the slice of price inside it.
| Slice of purchase price | Rate | On a $650,000 home |
|---|---|---|
| First $55,000 | 0.5% | $275 |
| $55,000 to $250,000 | 1.0% | $1,950 |
| $250,000 to $400,000 | 1.5% | $2,250 |
| Above $400,000 | 2.0% | $5,000 |
| Total | $9,475 | |
| First-time buyer refund | up to $4,000 | minus $4,000 |
| You actually pay | $5,475 |
Above $2,000,000 there is a 2.5% band on single-family homes. Your lawyer normally claims the $4,000 first-time refund at registration, so you never front the money. Confirm that well before closing: if it is missed you pay the full amount and claim the refund afterwards.
Piece 3: the 8% Ontario tax on mortgage insurance
This is the line that surprises people, and it is Ontario specific. Under 20% down your mortgage needs default insurance. The premium is added to the loan, so it does not come out of pocket. But Ontario charges 8% provincial sales tax on that premium, and the tax cannot be financed. It is cash, at closing, every time.
On our $650,000 example with $40,000 down and a 30-year amortization (the number of years scheduled to repay the loan in full), the premium is $25,620 and the tax on it about $2,050. At 25 years the premium is $24,400 and the tax about $1,952. Thepremium tiers and the 30-year surchargeare worth reading before you pick an amortization.
Piece 4: lawyer, title, inspection and adjustments
Budget roughly $4,500 for the rest on a typical Ontario resale. It covers four things:
- Legal fees and disbursements. Your lawyer searches title, registers the transfer and mortgage, and moves the money. Disbursements are third-party charges paid on your behalf.
- Title insurance. A one-time policy covering defects, fraud and survey problems. Lenders require it, and unlike default insurance it protects you too.
- Home inspection. Paid before closing, often before your offer is accepted. Not required, but skipping it on a resale home is how people inherit expensive surprises.
- Adjustments. Reimbursing the seller for anything prepaid past closing, usually property tax and, on a condo, the current month of fees.
One Ontario trap: rental hot water tanks are common on resale homes, around $40 a month on a contract that transfers to you. Have the seller buy it out before closing.
The 1.5% own-funds expectation
Separately from the down payment, lenders want roughly 1.5% of the price in your own accounts for closing costs, verified with 90 days of statements. On $650,000 that is $9,750. It is a floor the lender checks, not a forecast of what you will spend: in the example below the real non-down-payment cash is about $12,025.
What does not count, and why timing matters
Lender cash back
Federal lending guidelines (B-20 and B-21) forbid counting any lender cash back toward the minimum down payment. Using it for closing costs is accepted. The catch is timing: flat bank promotions of about $2,000 to $3,000 on a $500,000 to $749,000 mortgage pay out 6 to 8 weeks after funding, too late to pay your lawyer. Percentage cash backs are advanced at funding through the lawyer and do help, but cost roughly 0.25 percentage points of rate per 1% of cash back, and are clawed back if you break the mortgage early.
Realtor commission rebates
In the GTA the seller typically pays about 2.5% to the buyer side, and rebate brokerages realistically hand back 1.0% to 1.5% of the price. Most pay by cheque one to two weeks after closing, so again, not closing-day money unless promised in writing. Keep a rebate in your buyer representation agreement, never in the purchase agreement, because a credit written there reduces the value the lender lends against. A rebate on a home you live in is not taxable income. Thecash back and rebate guideworks through the trade-offs.
The full worked total: $650,000 in the GTA
Assuming the minimum down payment, a 30-year amortization, a purchase outside Toronto, and the first-time refund claimed.
| Item | Cash at closing |
|---|---|
| Down payment (5% of $500,000 plus 10% of $150,000) | $40,000 |
| Ontario land transfer tax after the $4,000 refund | $5,475 |
| 8% Ontario tax on the $25,620 insurance premium | about $2,050 |
| Lawyer, title insurance, inspection, adjustments | about $4,500 |
| Insurance premium itself (added to the mortgage) | $0 |
| Cash to close | about $52,000 |
The down payment is only about 77% of the cash you need, and inside Toronto the municipal land transfer tax pushes it higher again. These are planning estimates, not financial or legal advice: your lawyer produces the binding statement of adjustments and a broker confirms your premium.
Closing-day checklist
- Down payment seasoned in your own account, with 90 days of statements ready.
- At least 1.5% of the price in additional own funds, ideally closer to 2%.
- Land transfer tax calculated for your municipality, with the first-time refund confirmed.
- The 8% tax on the mortgage insurance premium budgeted as cash, not financed.
- Lawyer quote in writing, including disbursements and title insurance, not just the headline fee.
- Inspection paid up front, and rental equipment (hot water tank, furnace) bought out by the seller.
- Any cash back or rebate treated as arriving after closing unless you have it in writing.
- A separate cushion for moving, repairs and the first property tax bill.
Once the cash works, the next question is whether a lender will approve you: that comes down to thestress test and the GDS and TDS ratios.