If you’re considering condo living, you might be wondering what costs are involved with purchasing a condominium in Toronto and how these costs might differ from buying a house. Here’s a breakdown of the cost of owning and carrying a condo.
The down payment
No matter whether you purchase a house or condo, your down payment depends on the price of the property. The sum ranges from 5% for properties $599,000 and under, to 20% for $1 million and more. Don’t forget that once you start the condo search, you’ll need to keep money accessible for the deposit if your offer is accepted.
First-time homebuyer? You can see if you qualify for the First-Time Home Buyer Incentive. There’s also the Home Buyers’ Plan (HBP) which allows you to withdraw up to $35,000 from your RRSP to use towards a down payment and pay it back within 15 years.
Closing costs
Closing costs upon purchasing a condo can include the land transfer tax, real estate lawyer fees, and administrative fees. It’s a good idea to budget for 1-4% of the purchase price.
Mortgage payments
When purchasing any property, your mortgage payments will depend on your rate, the size of your down payment, and the amortization period (the length of time required to pay off the entire mortgage). To get a sense of what your payments could look like, try our Mortgage Calculator.
Maintenance fees
Also known as condo fees, maintenance fees are monthly installments that you should factor into the cost of owning a condo. These fees range from $0.50 to $1 per square foot in Toronto and cover repairs and cleaning of common spaces and amenities, concierge services, a reserve fund for larger projects, and sometimes utilities depending on the building. If you’re buying a condo in a new building, budget for an increase in fees after the first year.
Special assessment fees
You should be aware that special assessment fees could arise. This additional charge would come from the condo board to cover an unforeseen expense if the reserve fund can’t cover the cost.
Condominium Insurance
Condo buildings often have insurance for common spaces, but your mortgage lender or the building will likely require you to have insurance for your unit, too. This will cover your personal property, liability, and cost of repairs.
Taxes
Factor in the annual property tax if you decide to purchase a condo, which is based on the property value and municipality. You can estimate your property tax in Toronto with this calculator.
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