Closing Costs & Insurance
Appraisal, Inspection, and Title Insurance Costs
A mortgage appraisal cost is usually a few hundred dollars, but who pays varies. See appraisal, inspection, and title insurance costs, and how to cut them.
A mortgage appraisal cost is typically a few hundred dollars, though who pays it depends on your lender and the type of mortgage. An appraisal is only one of several property-related costs at closing, alongside the home inspection, title insurance, and sometimes a survey. Each protects a different party, and knowing which is which helps you decide where to spend and where to push back.
What an appraisal is and why lenders order one
An appraisal is an independent opinion of a property's market value, prepared for the lender. Lenders order one to confirm the home is worth at least the amount they are lending against, which protects them if they ever have to sell it to recover the debt. It is not a home inspection and it does not assess the condition of the building.
An appraisal is most often required for a high-ratio mortgage, a refinance, or a purchase where the lender wants confirmation of value. For a straightforward purchase with a strong down payment, some lenders waive it or rely on an automated valuation. The closing costs guide lists it among the other upfront items.
Appraisal costs
The fee depends on the property type, its location, and how complex the valuation is. Rural properties, unique homes, and multi-unit buildings usually cost more to appraise than a standard urban house. The lender selects and orders the appraisal, but the borrower often pays, either directly or through a fee added to the mortgage.
If you are refinancing or switching lenders, the new lender may require a fresh appraisal even if you had one recently. Ask whether the lender will cover it, because many do as a way to win the business. The switching guide covers how to compare those offers.
Appraisals can also cause delays. If the appraised value comes in below the purchase price, the lender may lend less than expected, and you may need to cover the gap in cash or renegotiate the price. Ask your lender how it handles a low appraisal before you remove your financing condition.
Home inspection costs
A home inspection is ordered by you, the buyer, and it examines the condition of the home: the roof, foundation, electrical, plumbing, heating, and other systems. It is not required by law or by the lender, but it is one of the best ways to avoid buying a costly problem.
The inspector's report gives you information to renegotiate, walk away, or plan for repairs. Inspections are usually arranged before you remove conditions, and the cost is paid directly by the buyer. A larger or older home, or one with outbuildings, may cost more to inspect.
A good inspector will encourage you to attend, and the walkthrough itself is often as valuable as the written report. Budget for the inspection as a cost of buying well, not as an optional extra, especially in an older home or one with recent renovations.
Title insurance and title search
Title insurance is a one-time premium that protects you and your lender against certain title problems, such as fraud, survey errors, or outstanding liens that were missed. Your lawyer usually arranges it as part of the closing. A title search, by contrast, is the lawyer's review of the public record, and its cost is normally included in the legal fee rather than billed separately.
Premiums are based on the purchase price and the amount of coverage, and the policy is usually issued for a one-time premium that does not renew. Keep the policy with your closing documents, because it can protect you years later if a title issue surfaces.
Title insurance is not the same as home insurance, which covers the property against fire, theft, and liability. Both are separate costs, and the true cost of ownership guide places home insurance among the ongoing expenses.
Other inspections and reports
| Item | Estimated cost | Who orders it |
|---|---|---|
| Appraisal | Roughly $300 to $600 | Lender |
| Home inspection | Roughly $400 to $800 | Buyer |
| Title insurance | Roughly $250 to $700 | Buyer's lawyer |
| Survey or certificate of location | Roughly $500 to $1,500 | Lender or buyer |
| Septic or well inspection | Roughly $300 to $800 | Buyer |
| Status certificate or condo documents | Roughly $100 to $500 | Buyer |
These ranges are illustrative estimates only. Actual prices vary by region, property, and provider, and they are not quotes. Confirm current pricing with the provider before you commit.
Who pays what, and how to reduce costs
Appraisals are usually the borrower's cost but are sometimes absorbed by the lender. Inspections are always the buyer's choice and cost. Title insurance is arranged by your lawyer and billed to you. Surveys are sometimes required by the lender and sometimes already available from the seller. Some sellers provide a pre-listing inspection, but remember that it was ordered by the seller, so treat it as information rather than an independent opinion for you.
- Ask the lender to waive or cover the appraisal, especially when you have a large down payment or a strong file.
- Reuse an existing survey if the seller has a recent one, since a new certificate of location can be expensive.
- Time the inspection so it happens before conditions are removed, giving you leverage to renegotiate.
- Attend the inspection so you can ask questions and see the issues for yourself.
- Bundle title insurance and legal work with one lawyer to avoid duplicate disbursements.
- Compare quotes from a few inspectors and lawyers rather than accepting the first price.
For the sequence from offer to closing, see the step-by-step buying guide, and total the items with the closing costs calculator.
Frequently asked questions
How much does a mortgage appraisal cost in Canada?
It typically ranges from roughly $300 to $600, depending on the property type and location, with rural and complex properties costing more. The lender orders it and the borrower often pays, though many lenders waive or cover the fee. Treat the range as an estimate and confirm the current price with your lender.
Is an appraisal the same as a home inspection?
No. An appraisal estimates market value for the lender and does not examine condition. A home inspection examines the condition of the building and its systems for the buyer. You need both for different reasons: the appraisal protects the lender, and the inspection protects you.
Do I need title insurance if I have a lawyer?
They serve different purposes. Your lawyer conducts a title search and reviews the public record, while title insurance protects against title problems that may not appear in the search, such as fraud or certain liens. Most lenders require title insurance on a mortgage, and your lawyer usually arranges it.
Can I avoid paying for an appraisal?
Sometimes. Lenders may waive the appraisal for a straightforward purchase with a large down payment, or use an automated valuation. You can also ask the lender to cover the fee as part of the deal. A refinance or a switch usually triggers a new appraisal, so confirm before you apply.