Personal Finance

First Time- Condo-buyer

  • Last Updated:
  • Oct 12th, 2009 9:41 pm
[OP]
Newbie
Jul 10, 2009
22 posts
1 upvote

First Time- Condo-buyer

Hi all,
I'm pretty new to a lot of this but let me explain my situation and any feedback would be appreciated. I am really sick of renting and looking at purchasing a 2-bedroom condo for around 125,000-135,000 which seem to be readily available around hull/ottawa area. I currently make 3200$ after tax each month. I have 5000 saved for a downpayment and no debt. Since interest rates are so low right now, I am looking at a mortgage around 700 per month, with condo fees around 150-200, electricity and taxes for an extra 150-200. This keeps my total around 1000 which is the maximum I feel is safe to spend on housing. What I'm wondering is will interest rates, which I'm pretty certain will raise within 5 years, push my mortage to an unaffordable level? Any tips or advice would be very welcome. :confused:
1 reply
Deal Expert
User avatar
Aug 18, 2005
18997 posts
3655 upvotes
Burlington-Hamilton
1. Please see my article HERE.

2. Holy crap, a 2 BR condo in central GTA would be like 3 times that price!!!

3. I would prefer to buy with at least a 20% downpayment because you are going to piss a lot of money away in CMHC premiums over the years.

4. If you are buying a new condo and getting the first time home buyers LTT (land transfer tax) discount, you probably would have $7-10K in closing costs. It would be less for a used condo.

5. Most people go for more house than they can afford, but you are actually right in the sweet spot for income versus mortgage size. If the condo is good, I say go for it! As for interest rates, why don't you just be weird and get a LONG fixed rate mortgage with good prepayment options. There's zero risk in that.

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