For homebuyers, closing day is an eagerly-awaited milestone. Not only are the details and conditions of the transaction, including the mortgage and any inspection requirements, sorted out, but the keys will officially be handed over from the lawyers, granting newly-minted homeowners access to their new abode.

However, there can be one oft-overlooked downfall of closing day ? having to pony up for final closing costs. These expenses, which cannot be rolled up into mortgage financing and must be paid in cash, can come as a surprise to many first-time homebuyers, as they can total tens, or even hundreds, of thousands of dollars, depending on where they live in Ontario.

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What?s included in closing costs?

Closing day costs include the remainder of the downpayment (minus any amount that was paid in the initial offer deposit), land transfer tax and lawyer costs. As well, if buyers put less than 20 percent down on their home purchase and were required to take out mortgage default insurance, the provincial sales tax (PST) is due on closing day, despite the premiums being amortized over the course of the mortgage itself.

Aside from the downpayment, land transfer tax is typically the heftiest part of closing costs. And, considering Toronto is the only city in Ontario that also charges a municipal land transfer tax on top of the provincial one, you?d think that buyers seeking houses for sale in Toronto would face the steepest bill ? but that?s not actually the case!

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Buyers pay the most in pricey 905 markets

According to a recent study by Zoocasa, Oakville and York Region municipalities actually surpass Toronto as the most expensive cities in the province for closing costs, mainly due to their higher average home prices.

To determine total closing costs across the province, Zoocasa calculated the downpayment on an average-priced home, the PST on mortgage insurance premiums, land transfer tax, legal fees and miscellaneous items.

In addition to Oakville, Richmond Hill and Vaughan ranked as the third most expensive cities, beating out Toronto, which comes in at number four. Looking at the calculations, a first-time homebuyer in Oakville would need around $237,530 in cash on closing day, $235,175 in Richmond Hill, $225,505 in Vaughan, but only $87,916 in Toronto.

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Want to pay less? Get out of the big city

Meanwhile, the three cheapest places to buy in the province are smaller, more remote urban centres ? Windsor, Sudbury and Thunder Bay. There, buyers would be able to get away with putting down just five percent of the average home price. And, while they?ll need to pay mortgage insurance premiums, they?re relatively inexpensive, coming in under $1,500. As well, because first-time buyers are exempt from provincial land transfer tax on homes priced below $368,000, these buyers are spared this levy almost entirely. All in, the total amount buyers would need on closing day is $22,318 for Windsor, $15,726 for Sudbury and just $13,760 for Thunder Bay.

Check out the infographic below to see where your city ranks:

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