A Project for Every Budget
Your preferences will determine where you choose to live, but so will your borrowing capacity. Be sure to keep the following in mind when calculating what you can afford.
The costs involved for the purchase include:
- A down payment of 5% to 10% of the total condo sales price.
- If your down payment is less than 20% of the total condo price, you will need loan insurance on your mortgage, which requires that you pay a 9% tax on this insurance at the outset.
- Notary fees, which can vary between $1,000 and $2,000.
The recurring after-purchase expenses include:
- Your mortgage loan, which will need to be paid at the frequency you agreed to with your bank (monthly, bimonthly, etc.).
- Monthly condo fees, which vary by property and are based on the square footage of your unit.
- Municipal and school taxes, which are calculated based on the value of your condo and the city where you live.
In addition to these expenses, every new owner must pay a municipal property transfer tax (also known as the “welcome” tax) in the months following the purchase of their home. The amount will vary according to the purchase price of the residence and the municipality where the property is located.
Incentives to purchase
There are a number of programs available—like the Home Buyers’ Plan (HBP)—that enable those who have not been homeowners in the last five years to withdraw up to $25,000 from their RRSP to finance their property, without penalty. You then have 15 years to reimburse the funds.
You may even be eligible for a partial tax rebate on the purchase of a new condo.
Finally, if you are a first-time buyer, you may also be able to take advantage of the Home Purchase Assistance Plan—a program jointly funded by the City of Montréal and Quebec government.