hi ,

"Is it a good time to buy a condo?"

I get some version of this question weekly. Here's the honest answer: that's not actually the number that should decide it for you.

I saw someone recently posted this and they are working through a real scenario - a $188K condo, 5% down, planning to use it as a stepping stone toward a house down the road. It's a smart instinct. But "stepping stone" plans live or die on math most people never run. So let's actually run it.

The down payment isn't the whole down payment.

Put 5% down on $188K, and you're borrowing $178,600. Because you're under 20% down, that mortgage gets CMHC insurance - and at a 95% loan-to-value, the premium sits at 4%.

That's roughly $7,100, added on top of your mortgage balance. In Ontario, you also pay 8% provincial tax on that premium - around $570 - in cash, at closing, not financed. So the "$1,700/month" a buyer budgets for often doesn't yet reflect this.

It's not a dealbreaker. It's just a number that needs to be in the spreadsheet, not a surprise on closing day.

The exit has a price tag too.

This is the part "stepping stone" plans usually skip. Five years from now, selling means paying commission, legal fees, and mortgage discharge costs.

Buying the next place means paying land transfer tax again - provincial, and municipal too if that next home is inside Toronto proper.

On a mid-priced move-up purchase, that combination can easily run into the five figures. None of that becomes your equity. It just becomes the cost of moving.

Why this matters:

A stepping-stone plan only works if what's left after all of that - selling costs, buying costs, and five years of mortgage paydown plus (hopefully) appreciation - actually gets you meaningfully closer to the house.

If it barely breaks even, you haven't built a stepping stone. You've built a very expensive holding pattern.

The takeaway:

Before anyone decides condo-now versus rent-and-save, map both scenarios five years out - full cost in, full cost out - not just the monthly payment today.

If the math still works, that's a real green light, not a guess. If it's tight, giving yourself more time to save isn't losing. It's protecting the plan.

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Planning to sell your condo / townhouse to buy a detached home with a basement rental? Use my calculator that includes a basement rental income by clicking the button down below.

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Talk soon,

Fred "Bungalow Basement Hunter" Camingal