How Do Condo Fees Affect Your Mortgage in Toronto?

Quick answer: Yes, condo fees affect how much you can borrow. For an insured mortgage, CMHC requires lenders to count 50% of your monthly condo fee in your debt ratios, alongside the mortgage payment, property tax and heat. Every $100 of monthly fee takes about $7,400 off the mortgage you qualify for at today’s stress-test rate. On a $150,000 household income, a $600 fee means about $44,000 less mortgage than a home with no fee.

Most Toronto first-time buyers start with a condo, so this matters early. Two condos at the same price can leave you with very different budgets, and the fee is the reason.

How do lenders count condo fees?

Lenders check two ratios at the stress-test rate, which is the greater of your contract rate plus 2% or 5.25% (CMHC):

• Gross debt service (GDS): mortgage payment, property tax, heat and 50% of the condo fee, as a share of your gross income. CMHC’s limit is 39%.
• Total debt service (TDS): the same, plus car loans, credit cards and every other debt. The limit is 44%.

Half of the fee goes into both ratios. You’ll still pay the full fee every month, so a lender saying yes doesn’t mean the payment is comfortable. Budget for the full amount.

At the best insured 5-year fixed we tracked as of October 19, 2026 (4.64%), the qualifying rate is 6.64%. That’s the rate the example below uses. For how the test works, see how the mortgage stress test works for Toronto buyers.

How much do condo fees reduce what you can borrow?

Here’s an example for a household earning $150,000 a year with no other debts, buying with less than 20% down. The $350 a month for property tax and heat is an illustration. Toronto’s 2026 residential tax rate is 0.767311% of the assessed value (City of Toronto), so a unit assessed at $500,000 pays about $320 a month in tax.

	No condo fee	$600 a month fee	$900 a month fee
Housing cost limit (39% of $12,500)	$4,875	$4,875	$4,875
Less property tax and heat (example)	$350	$350	$350
Less 50% of the condo fee	$0	$300	$450
Room for the mortgage payment	$4,525	$4,225	$4,075
Largest mortgage (6.64%, 25 years)	about $667,000	about $622,000	about $600,000

The $900 fee costs this household about $66,000 of buying power.

If they borrow the full $622,000 with the $600 fee, their actual mortgage payment at 4.64% is about $3,496 a month. Add the full $600 fee and $350 for tax and heat, and the home costs about $4,446 a month.

What do condo fees pay for?

In Ontario they’re called common expenses. They pay for the upkeep of the common elements, services such as cleaning and building maintenance, and contributions to the reserve fund (Condominium Authority of Ontario). Some buildings also include heat, water or hydro in the fee. Others meter them by unit, so check what’s in the fee before you compare two buildings.

The condo corporation sets a budget each fiscal year. Your share is a fixed percentage set out in the corporation’s declaration, usually tied to the size of your unit. If the budget goes up, so does your fee.

What should you check before you buy a Toronto condo?

The status certificate. It’s the corporation’s official statement on the unit and the building. It shows the unit’s fee and any arrears, any fee increase and the reason for it, any special assessment charged to the unit, the latest reserve fund study and the state of the fund, and any legal judgments against the corporation. In Ontario the corporation can charge no more than $100 including tax and must provide it within 10 days (Condominium Authority of Ontario). Make your offer conditional on your lawyer reviewing it.

The reserve fund. It pays only for major repairs and replacements, such as roofs, windows and elevators. Ontario condos must update their reserve fund study at least every three years, and the plan can require the board to raise contributions (Condominium Authority of Ontario). A thin reserve fund today usually means higher fees later.

Special assessments. When there’s a large shortfall, the corporation can charge each unit a one-time amount on top of the fee, split by the same percentages. The status certificate tells you whether one has already been charged to the unit.

A low fee isn’t always a good sign. If the building is old and the reserve fund is short, a cheap fee today may be the reason.

When doesn’t this apply?

The 50% rule is CMHC’s requirement for insured mortgages. With 20% or more down, the mortgage may not be insured, and the lender sets its own debt ratio rules. Some are more cautious than CMHC, so ask how your lender counts the fee before you rely on the numbers above. A condo bought as a rental is assessed differently, because the rent counts too. And the example assumes no other debts. A car loan or a line of credit counts in the 44% TDS ratio and lowers these numbers further.

What should you do next?

Before you book showings, get a pre-approval that uses real condo fees, not a guess. Send me two or three listings you’re looking at and I’ll show you what each fee does to your budget. Book a 20-minute call with Joshua Tagg.

This is commentary, not advice. Figures as of October 19, 2026. Rates change daily. Tax rates are set by the City of Toronto. All mortgages are subject to lender and insurer approval.