Condo vs freehold: does mortgage financing differ?

Mostly not: in Canada, a condo and a freehold home have the same minimum down payment, the same stress test and the same lenders. The difference is that for a condo, lenders generally count 50% of your condo fees as a housing cost when they work out how much you can borrow. The lender also looks at the building itself, often through the status certificate.

What stays the same for a condo and a freehold

Freehold means you own the house and the land it sits on. A condo means you own your unit plus a share of the common elements, managed by a condominium corporation.

For both, the federal minimum down payment applies. The minimum is 5% of the first $500,000 of the price and 10% of the portion from $500,000 up to $1.5 million, and 20% at $1.5 million or more.

With a federally regulated lender, both are stress-tested at the greater of your contract rate plus 2 percentage points, or 5.25%. Banks, credit unions and monoline lenders lend on both.

How condo fees affect how much you qualify for

Lenders measure affordability with your GDS ratio: housing costs as a share of gross income. For an insured mortgage, CMHC counts mortgage principal and interest, property tax, heating, and 50% of condo fees, and caps GDS at 39%. TDS, which adds your other debts, is capped at 44% (source: cmhc-schl.gc.ca, checked October 2026).

Here is a simple example, with illustrative figures. A household earns $120,000 a year, so 39% of monthly gross income is $3,900. Compare two homes, each with $400 a month in property tax and $100 for heating:

• Freehold: $3,900 minus $500 leaves $3,400 for the mortgage payment.
• Condo with $700 monthly fees: half the fees, $350, also counts, leaving $3,050 for the mortgage payment.

The condo buyer qualifies for a smaller mortgage at the same income, even if the price is similar. Many uninsured lenders count condo fees in a similar way, though their exact rules vary.

What lenders review on a condo

With a condo, the lender is lending against a share of a building, so the lender looks at the building's health as well as your unit. The lender may review the status certificate, a document from the condo corporation. The certificate describes the corporation's finances, reserve fund, any legal actions and any special assessments. Your real-estate lawyer reviews the certificate too, and many buyers make their offer conditional on that review.

Some lenders have extra rules for certain building types, such as very small units, buildings with many rental units, or condo-hotels. If a building does not fit one lender's policy, another may accept it.

What lenders review on a freehold

On a freehold, the lender focuses on the property's value and condition through an appraisal. You budget separately for repairs and maintenance, with no condo fees but no shared reserve fund either. Unusual properties, such as those on large rural lots or with wells and septic systems, may have their own lender requirements.

What to do next

If you are comparing a condo and a freehold, use our call-me-back form and we will show you how each affects what you qualify for. You can also try the affordability calculator.