If you’re one of those who used a budget when you started shopping for condos in Montreal, then chances are, you are already pondering about how much you will spend each month in your new living situation. Condo living is oftentimes more affordable than buying a house but there are financial considerations when you’re planning your new budget.
Setting a Budget for Your New Condo
In general, sales of condos have gone up in the whole country but in some areas like Montreal, it’s been quite steady. Still, more and more people are saving their money for downpayment and getting a mortgage. But these aren’t the only expenses you’ll need to consider. You also have to pay for the closing costs such as title insurance, land transfer taxes, legal fees, and others. This will be about 1.5-4% of the price of the condo and you’ll need to pay for them in cash.
Setting a Budget for Living in Your Condo
Aside from your monthly mortgage payments, you’ll also need to set aside a budget for your property taxes. Every year the value of your property will be assessed by your municipality multiplied by the tax rate (it varies per location) and then you will receive a bill. Some lenders will already include this cost in your mortgage divided in equal amounts to be paid over a 12 month period. But you also have the option to just pay them personally.
Other costs include the condo fees which also vary depending on how big your unit is, what amenities are available, etc. These fees cover the maintenance of amenities, landscaping, building lighting, elevators, etc. You also need to keep in mind that these fees tend to increase over time especially for new condos.
Setting a Budget for Condo Maintenance
Ideally, condo fees should already cover all major renovations and repairs in your building but the law states that only a portion of the yearly budget of the condo will be put into the reserve fund. In Ontario, only 10% will be set aside to cover roof repairs, plumbing, lawn maintenance expenses, etc. So what you can do is to save money for any future maintenance needs of your building or unit such as broken bathroom tiles, a malfunctioning heating system, and others.
You’ll also need to budget for home insurance. While this is not mandatory for condo owners, some banks do require it before they’ll approve your mortgage application and it’s also a good way to protect your investment.
Aside from what’s already been discussed here, you also need to consider the cost of decorating your condo. Remember that the amount can vary wildly and it really depends on how much you’re willing to spend. You can buy a $200 sofa but you can also get one for $2,000. The key is to set a realistic budget and give extra room for miscellaneous expenses which can come up when you shop for furniture, décor and fixtures.