Do condo owners know their monthly condo fees can increase at any time? Many don’t.
In fact, 68% of buyers in Toronto, Montreal, Calgary and Vancouver, didn’t realize condo fees might increase at any time. And more than one-third (38%) say they don’t know if they could afford an increase, finds a TD Canada Trust survey.
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“Purchasing a condo may help you build equity, but the financial commitment of owning a condo may be larger and more complex than many buyers may realize,” says Farhaneh Haque, director of mortgage advice, TD Canada Trust. “It’s important to do your research before you hit the open houses to understand the true costs of condo ownership.”
From burst pipes to leaky roofs, maintenance and other costs can crop up unexpectedly, so buyers should create a cushion in their budget, including an emergency fund.
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Is it really better to own than rent?
Owning a condo may help you build assets for your future, but Haque says there can also be long-term benefits to waiting and saving a larger down payment. A larger down payment can mean you pay less interest over the life of your mortgage, and if it’s more than 20% of the purchase price you won’t have to purchase high ratio mortgage insurance.
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“When comparing owning to renting, you have to weigh all the costs including the purchase price of your condo, the size of your down payment, condo fees, property taxes, immediate repairs or renovations, interest rates and insurance, and compare these with how much you are currently spending on rent,” she warns.