Canadian rental down payments and closing costs: budget the whole purchase

Do not apply homeowner low-down-payment rules to a property you will rent out entirely. The Canadian investment calculator models a conventional non-owner-occupied scenario, using a 20% down-payment planning floor and no mortgage insurance. This is a tool boundary, not a promise that every lender will approve an 80% mortgage.

CMHC’s Income Property program is a separate insured product for non-owner-occupied properties with two to four units. Its published criteria include at least 20% equity, a value below $1 million and a maximum 25-year amortization, with a dedicated premium schedule. A 20% contribution does not establish that no insurance can ever apply. Owner-occupied multi-unit purchases, corporate borrowing and specialized financing need a lender-specific assessment.

Your down payment buys equity. Transfer taxes and registration fees are transaction charges. Legal fees, inspection, title insurance and closing adjustments complete the closing budget. Renovations and an initial operating reserve are additional cash commitments, even when they are not payable on the closing date.

A purchase deposit normally forms part of the down payment; do not add it a second time. A legal statement may credit the deposit and show only the remaining balance to transfer. Likewise, financed charges are not cash paid upfront, but they increase the debt and may change future payments. Keep both views rather than combining them into one ambiguous ‘cost’ figure.

Ontario uses graduated provincial land transfer tax rates. Toronto adds its own municipal tax and administration charge; simply selecting Ontario without checking the municipality can substantially understate the budget. Toronto’s higher-value residential bands changed on 1 April 2026.

BC property transfer tax generally uses fair market value at registration, with graduated rates and a further residential charge above $3 million. Alberta instead charges registration fees for transfers and mortgages. The registered mortgage amount may differ from the amount you borrow, especially for a collateral charge. Other provinces and territories require their own schedules or a manual professional quote.

At 20% down, the equity contribution is $130,000. Outside Toronto, Ontario land transfer tax is $9,475. Inside Toronto, add $9,475 municipal tax and $115.89 administration including HST. BC’s tax at a $650,000 taxable value is $11,000. In Alberta, a $650,000 transfer and $520,000 registered mortgage total $1,270 in modelled registration fees.

Using an illustrative $3,700 allowance for legal work, inspection, title insurance and adjustments, the Ontario-outside-Toronto cash to close is $143,175 before deposit credits. A $10,000 reserve takes the initial budget to $153,175, before any renovations. Get quotes: these allowances are not representative professional fees for every transaction.

Our closing-cost tool does not assume first-time-buyer rebates for a rental. Foreign-buyer taxes, new-build GST/HST, trust or corporate ownership, mixed-use sites, multi-unit classifications and exemptions require professional advice. The tool is not an assessment of whether you may legally purchase the property.

Before removing conditions, confirm the lender’s down payment and registered charge, ask your lawyer for a tax and disbursement estimate, review strata documents and obtain insurance and repair quotes. Transfer the resulting cash-paid costs to the cash-on-cash tool manually; the tools do not automatically move your inputs between pages.