Financing a condo differs from financing a house in several important ways. From status certificates to condo fee impacts, this guide covers everything you need to know about condo mortgages in 2026.
What Makes Condo Mortgages Different
Key Differences from Houses
| Factor | Condo | House | -------- | ------- | ------- | Monthly condo fees | Added to debt ratios | N/A | Status certificate | Required before closing | N/A | Reserve fund | Lender reviews health | N/A | Age restrictions | Some have 50+ rules | Rare | Rental restrictions | May limit rental income | Usually none | Insurance | Unit vs. building | Full property |
Why Lenders CareYour unit is only as strong as the building:
Start Your Condo SearchGet pre-approved so you know exactly what you can afford, including condo fees. How Condo Fees Affect QualificationDebt Service Ratio ImpactLenders add 100% of condo fees to your monthly housing costs: Example: |
Cost | Monthly Amount | ------ | --------------- | Mortgage payment | $2,500 | Property tax | $350 | Condo fees | $600 | Total housing costs | $3,450 | Compare to house: | Cost | Monthly Amount | ------ | --------------- | Mortgage payment | $2,500 | Property tax | $400 | Heating (estimated) | $150 | Total housing costs | $3,050 | Impact: Higher condo fees = lower maximum mortgage.
Condo Fee Guidelines |
Monthly Fee Range | Lender View | ------------------ | ------------- | Under $400 | Generally no concerns | $400 - $700 | Acceptable for most units | $700 - $1,000 | May require explanation | Over $1,000 | Could limit financing options |
The Status Certificate: Your Essential DocumentWhat's Included |
Section | What to Look For | --------- | ------------------ | Reserve fund study | Adequate funding | Financial statements | No deficits | Upcoming special assessments | Amount and timing | Insurance certificate | Adequate coverage | Litigation | Outstanding lawsuits | Rules and regulations | Rental restrictions | Meeting minutes | Major issues discussed |
Red Flags to Watch
Cost: Typically $100-$150 to obtain. Special Assessments: The Hidden RiskWhat Are Special Assessments?One-time charges to all unit owners for major expenses not covered by the reserve fund. Common Causes
How Assessments Impact Mortgages |
Scenario | Lender Treatment | ---------- | ------------------ | Pending assessment | May add to debt load | Assessment during mortgage term | Your responsibility | History of assessments | Concern about building health |
Protecting Yourself
Condo Insurance RequirementsBuilding Insurance (Corporation)
Unit Insurance (Yours) |
Coverage Type | What It Covers | --------------- | ---------------- | Betterments and improvements | Upgrades beyond original unit | Personal property | Your belongings | Liability | Someone injured in your unit | Loss assessment | Your share of deductibles | Lender requirement: Must have unit insurance in place before closing.
Lender Restrictions on CondosWhat Some Lenders Won't Finance |
Restriction | Reason | ------------- | -------- | Buildings with <6 units | Too small for condo rules | Non-arms-length sales | Higher fraud risk | Leasehold properties | Complex ownership structure | Hotels/timeshares | Not traditional residential | High commercial percentage | Over 30-50% commercial |
Age and Condition Concerns |
Building Age | Consideration | -------------- | --------------- | Under 5 years | May need builder warranty | 5-25 years | Generally straightforward | 25-40 years | Reserve fund health critical | 40+ years | Major systems may need replacement |
Pre-Construction Condo MortgagesKey Differences |
Factor | Resale Condo | Pre-Construction |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Deposit | 5%+ at offer | 15-20% staged deposits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rate lock | 90-120 days | Usually not until completion | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Occupancy vs. closing | Same day | May be months apart | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage commitment | Firm at offer | May change at completion |
Occupancy Phase Risks
- You pay "phantom rent" during occupancy
- Final closing price may adjust
- Must still qualify when closing arrives
- Rate environment may have changed
FAQ
Q: Do condo fees include everything?
A: Usually includes building insurance, water, some utilities, common area maintenance, and reserve fund contribution. Electricity and contents insurance are typically separate.
Q: Can I rent out my condo unit?
A: Depends on the condo corporation's rules. Some restrict rentals entirely; others limit percentage of rental units.
Q: What if the building has structural issues?
A: Many lenders won't finance buildings with known structural problems. Get the status certificate reviewed by a professional.
Q: Are condo mortgages more expensive?
A: Generally no—rates are the same. But qualification may be harder due to condo fees.
Q: Should I have a lawyer review the status certificate?
A: Strongly recommended. The cost ($200-$400) is worth avoiding problems.
What's Next
Ready to buy a condo? Get pre-approved with our team and we'll help you navigate condo-specific mortgage requirements.
Buying a Condo?
Get pre-approved and understand condo-specific mortgage requirements.
