Condo vs House in Quebec | Complete Mortgage Guide

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The choice between a condo (divided co-ownership) and a single-family home is one of the first decisions a buyer must make in Quebec. This choice has direct implications for mortgage financing, recurring monthly costs, and maintenance responsibilities. In divided co-ownership, the buyer acquires a fraction (their unit) and a share of the common areas, all governed by the provisions on divided co-ownership in the Civil Code of Quebec (articles 1038 to 1109). The syndicate of co-owners administers the common areas and collects monthly charges (condo fees) to cover routine maintenance, building insurance, and contributions to the contingency fund. Since the 2020 legislative changes (Bill 16), the contingency fund must receive at least 5% of the annual budget, and a fund study is required within the first five years of the declaration of co-ownership. For financing, lenders and CMHC factor condo fees into the gross debt service (GDS) ratio calculation, which can reduce borrowing capacity. A lender will generally require a review of the declaration of co-ownership, the building condition certificate, and the maintenance log. A single-family home offers greater autonomy in terms of renovations and maintenance, but the owner bears all costs alone. Mortgage brokers should help clients compare the total cost of ownership in both scenarios.

Condo or house: understanding the mortgage differences

For a first-time buyer in Quebec, the choice between a condo and a house is often dictated by available budget and desired location. But beyond the purchase price, these two property types carry very different financial and legal obligations that directly affect mortgage qualification and long-term total cost of ownership.

Divided co-ownership in Quebec: legal framework

Divided co-ownership is governed by articles 1038 to 1109 of the Civil Code of Quebec. When you buy a condo, you become the owner of your fraction (private unit) and co-owner of the common areas (land, lobby, elevator, shared parking). The syndicate of co-owners, composed of all co-owners, is responsible for administering the common areas. Each co-owner must pay monthly charges, commonly called condo fees, which cover routine maintenance, building insurance, administrative management, and contributions to the contingency fund.

Contingency fund: A mandatory financial reserve established by the syndicate of co-owners to finance major repairs and replacements of common components. Since Bill 16, adopted in 2019 and progressively implemented from 2020, the fund must receive at least 5% of the syndicate's annual budget and be subject to a professional study.

Impact of condo fees on mortgage qualification

Lenders and mortgage insurers (CMHC, Sagen, Canada Guaranty) include the full monthly condo fees in the gross debt service (GDS) ratio calculation. Concretely, if your condo fees are $350 per month, this amount is added to your mortgage payment, property taxes, and heating costs to déterminé your GDS. Consequently, at equal income, a condo buyer will often qualify for a lower loan amount than a house buyer, where this expense item does not exist. This is a factor that first-time buyers frequently underestimate.

Single-family home: autonomy and responsibilities

A single-family home offers complete freedom in terms of renovations, exterior landscaping, and maintenance decisions, without needing syndicate approval. From a mortgage standpoint, the absence of condo fees generally allows greater borrowing capacity. However, the owner must budget all maintenance costs themselves: roofing, foundations, heating systems, plumbing, landscaping. The general rule suggests setting aside between 1% and 3% of the property value annually for maintenance. For a $400,000 property, this represents $4,000 to $12,000 per year.

Comparing total cost of ownership

Condo: mortgage payment + monthly condo fees + property taxes (often lower) + co-owner home insurance
House: mortgage payment + property taxes (often higher) + full home insurance + routine maintenance and reserves for major work
The monthly cost of a condo and house can be similar once all items are accounted for
Land appreciation is generally stronger for a house, as land gains value independently of the building

Frequently Asked Questions

Do condo fees affect my mortgage borrowing capacity?

Yes. Lenders include 100% of monthly condo fees in the gross debt service (GDS) ratio calculation. For example, monthly condo fees of $400 reduce the amount available for the mortgage payment by the same amount, which can decrease the admissible purchase price by tens of thousands of dollars.

What is a condo contingency fund?

The contingency fund is a mandatory financial reserve managed by the syndicate of co-owners. It is used to finance major repairs and replacements of common elements (roof, elevator, windows). Since Bill 16 (2020), the syndicate must contribute at least 5% of its annual budget and commission a contingency fund study.

What documents does the lender require for a condo?

The lender will generally request the declaration of co-ownership, recent meeting minutes from co-owner assemblies, the building condition certificate, the contingency fund study, the syndicate's annual budget, and confirmation of building insurance. Issues identified in these documents may lead to financing being declined.

Does a house always cost more than a condo?

The purchase price of a house is often higher, but total cost of ownership should be compared. Monthly condo fees (often $200 to $600 or more) are added to the condo's mortgage payment. Over 25 years, these fees represent a substantial sum. However, the homeowner directly bears maintenance costs that are included in condo fees.

Does CMHC impose additional criteria for condos?

Yes. For mortgage loan insurance, CMHC requires that the condo project meet certain criteria: an adequate contingency fund, a minimum percentage of units sold (generally 50% or more), a limited proportion of units held by a single investor, and no significant litigation against the syndicate.