When buying a home in Montreal, you will need to budget your monthly carrying costs including your mortgage fees, taxes and utilities along with the closing costs of your purchase. Having a clear idea of your total costs will help you decide whether you are financially prepared for the move from renting to homeownership.
Here are some of the costs you will have to pay upon closing, and recurrently each month, as the owner of a condo or a single family home:
Your mortgage payment includes the principal (the loan you are paying back on a monthly basis) and the interest on that loan. The amount paid as part of your total mortgage payments will depend on your pre-determined interest rate, the amount of your downpayment, the duration of your mortgage, and the frequency of your payments.
Related: How to Shop Around for a Mortgage
There are two types of property taxes in Quebec: municipal tax, and school taxes. Property taxes cover public expenses related to your property, and are determined by each municipality and may change on a year to year basis. Generally speaking, they range between 0.5% and 2.5% of your property’s market value. School taxes contribute to the maintenance of educational institutions in your neighbourhood, and are paid in two instalments per year to the Comité de Gestion de la Taxe Scolaire de l’Île de Montréal (CGTSIM). The 2016-2017 school tax rate is $0.17765 per $100 of assessed value. Last year’s rate was $0.18839.
Condo fees are mandatory monthly fees paid to your condo association, which covers maintenance of the building and its amenities, insurance, and contributions to the reserve fund for larger expenses.
Utilities and bills
Your utility costs will include electricity, water, internet and heating costs. The cost of utilities will vary widely from property to property based on square footage, season, and the type of heating system installed.
Home insurance protects you against incidental damage to your home, such as flooding, vandalism and theft. If your downpayment amounts to less than 20% of the property’s value, you will also be obligated to take out mortgage insurance protecting yourself against potential defaults on your loan repayment.