If you’ve figured out how much it’ll cost you to buy a condo, the next step is to get a grip on what it’ll cost to own. Your monthly spend will be more than just your mortgage. Other stuff, like maintenance fees, parking spots and taxes can add up, so add them into your budget before you figure out what you can afford.
The mortgage payment. This number will depend on your down payment, your mortgage rate, and your amortization period. (For definitions of all these terms, check our Mortgages 101 post.) An easy rule of thumb is to calculate $500/month for every $100K of mortgage. With interest rates as low as they are now, it will likely be less, but it’s a quick way of estimating. So for a $600K mortgage, your monthly payment would be around $3,000.
Want to see how much you’d pay if the price or the down payment is different? Use this calculator.
Maintenance fees. These are a shared fee paid by every owner in the building. They cover costs like cleaning and concierge staff, and a percentage is put away for building maintenance and repairs. Maintenance fees are based on square footage, and in Toronto, the average maintenance fee is about $0.64 per square foot. So if you’re buying an 800 sf unit, you’re looking at about $512 a month. Those stats will be part of your listing, and it’s important to factor them into your budget along with your mortgage payment.
Want to see if your condo’s fees are a good value? Here’s the scoop on figuring that out.
Property taxes. Your property tax pays for everything from public schools and libraries to emergency services, running water and waste treatment. Your bill is based on the municipal tax rate, education tax rate, and the value of your property. For a $600,000 condo, it would run you around $3,800 a year – but don’t worry, most banks will combine that with your mortgage payment so you don’t have to worry about it. (Once your mortgage is paid off, you’ll need to take care of them yourself.)
Parking. Your parking spot comes with its own little maintenance fee (which you’ll only pay if you have a spot, so if you’re car-free, there’s no need to worry about it.)
If you’re buying a resale, the spot is usually part of the sale price, but make sure you find out about the fee for upkeep.
Homeowners insurance
Your maintenance fees probably cover building insurance for the common areas like the lobby, elevators, and gym. But they won’t cover your suite or personal belongings, so you’ll need to insure that separately – budget $20-100/month.
Special assessments
If the roof needs repair or the AC goes on the fritz, that’s what the building’s reserve fund is for. But if the fund is low or a big project goes over budget, you could be in store for a special assessment, where you’ll be charged a share of that extra expense in addition to your maintenance fees. More on special assessments here. This cost isn’t one you can really predict – it depends what needs to be done, but it’s not uncommon to have to hand over $10K or more. A big repair that older buildings face is replacing windows - a repair that can run owners $20K plus.
A well-managed reserve fund is the best protection, but just in case, ask if your home insurance covers special assessments – some do.