Joel DyckReal Broker SK Ltd.
Saskatoon · From the topic map

How do I estimate the full monthly cost, not just principal and interest?

Add property taxes, heat and power, insurance, and any condominium fees to principal and interest, then check the total against the lender's ratios. The City of Saskatoon bills property tax annually and many lenders collect it monthly with the payment. Mortgage default insurance from CMHC adds a premium too.

Lenders test two ratios. Gross debt service, usually capped near 39 percent, covers the mortgage payment, taxes, heat and half of any condominium fee. Total debt service, usually capped near 44 percent, adds your car payment, credit lines and card minimums. Federally regulated lenders also qualify you at the higher of your contract rate plus two percentage points or the minimum qualifying rate, so the payment they test is not the payment you make.

Two Canadian details change the math. Canadian mortgages compound semi-annually rather than monthly, which makes a posted rate slightly cheaper than the same number would be south of the border. And Saskatchewan charges PST on the CMHC premium, payable at possession rather than added to the loan, so budget it as cash alongside legal fees of $800 to $1,500.

If the property is a condominium, read the reserve fund study before you trust the fee. The Condominium Property Act, 1993 requires the corporation to maintain that fund, and a thin one means special assessments later that no affordability calculator will have shown you. Joel Dyck goes through the estoppel material and the fee history with buyers before they commit to a monthly number.

Get your hand-reviewed valuation from Joel Dyck.

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