Key points
- Supply the actual condo fee and taxes.
- Ask what corporation documents the lender needs.
- Separate approval limits from a comfortable budget.
How the fee enters affordability
CMHC says 50% of condo fees must be included in gross and total debt service calculations for its mortgage loan insurance. That is a qualification formula, not a statement that you only pay half the fee. Your cash-flow plan should include the full fee.
Other lenders and mortgage products can apply different rules. Ask your mortgage professional to run the numbers for the actual unit and current program.
The building can matter to a lender
Depending on the lender and transaction, the corporation’s finances, insurance, occupancy, construction, litigation or special levies may prompt further questions. A financing condition should leave room to address both your income and the specific property.
Share the property address, current condo fee and relevant documents early. If the inspection or document review reveals a significant issue, tell your mortgage professional before removing conditions.
Build a budget for living in the condo
Add the full mortgage payment, full condo fee, taxes, utilities, unit insurance, parking, maintenance and a personal reserve for surprises. Test how a fee increase or levy would affect you. A lender’s maximum approval is not a target spending level.
Kristen Young of Merge Mortgage Group is a RealPartners-recommended financing contact for buyers seeking a tailored discussion in Alberta or British Columbia.
Common questions
Does a pre-approval guarantee the condo is financeable?
No. Final approval also depends on the lender’s review of the specific property, documentation and updated borrower circumstances.
Sources and further reading
Primary references for legal and financial background. Inspection scope and provider services should always be confirmed for the specific property.