What Are Closing Costs?

You’ve found your dream home in Calgary, the seller has accepted your offer, your mortgage has been approved, and you’re eager to move in. Before you get the keys, there’s one more step – the closing.

Also called the settlement, the closing is the process of transferring ownership of the property from seller to buyer. On closing day you’ll sign a stack of documents with your lawyer and lender, and you’ll pay your down payment plus a range of closing costs. Understanding these fees in advance helps you avoid surprises and budget properly for your Calgary home purchase.

What Are Closing Costs?

Closing costs are the final expenses you pay on or before the closing date to complete the purchase of your home. They cover legal work, land title registration, mortgage setup, and various adjustments between you and the seller.

In Calgary, buyers can generally expect total closing costs to be somewhere in the range of 1.5% to 4% of the purchase price, depending on the type of property, size of your mortgage, and specific services required.

Common Closing Costs for Calgary Home Buyers

Appraisal Fee: Pays for a professional appraisal of the property so the lender can confirm its value. Sometimes this is paid at the time of application, and sometimes it is collected at closing.

Credit Report Fee: Covers the cost of pulling your credit report as part of the mortgage approval process.

Loan Origination / Lender Fee: A fee charged by the lender for processing and underwriting your mortgage.

Rate Buy-Down or Discount Points: A one-time cost if you choose to pay extra upfront to secure a lower interest rate on your mortgage.

Mortgage Default Insurance: If you purchase with a lower down payment, your lender may require mortgage default insurance. The premium can sometimes be added to your mortgage, but related fees may be due at closing.

Title Search & Title Insurance: Covers the cost of searching title records and, if applicable, insuring you and/or the lender against certain title issues.

Lawyer’s Fees & Disbursements: Your real estate lawyer charges a fee for reviewing documents, handling the closing, and registering the transfer of title and the mortgage. Their invoice will also include disbursements such as courier fees, copies, and land titles searches.

Land Title / Registration Fees: Charged to register the transfer of ownership and your new mortgage at the Alberta Land Titles Office.

Prepaid Interest: Covers interest from the closing date up to the date of your first regular mortgage payment. If you close early in the month, this amount is usually higher.

Property Tax & Utility Adjustments: You may need to reimburse the seller for any property taxes or utilities they’ve prepaid beyond the closing date, or receive a credit if you’re taking over partway through a billing period.

Common Questions About Closing Costs in Calgary

How much should I budget for closing costs?
A good rule of thumb is to set aside a few percent of the purchase price, then ask your lawyer and mortgage professional for a personalized estimate before you waive conditions.

Who pays closing costs?
Buyers in Calgary usually pay their own closing costs, including legal, land title, and mortgage-related fees. However, some items can be negotiated with the seller as part of your offer.

Are closing costs different for condos and townhomes?
Many costs are similar, but condo and townhome purchases can involve additional documents and estoppel certificates from the condo corporation. Your lawyer will explain any extra fees specific to your property.

Who can help me understand my closing costs?
Your Calgary REALTOR®, mortgage specialist, and real estate lawyer all play a role in explaining your closing costs. Don’t hesitate to ask questions well before closing day so everything is clear.