The lender’s maximum isn’t your budget
What it really costs per month
On top of the mortgage payment, add taxes, heating, insurance, condo fees, and maintenance. The cash you pay at closing is a separate envelope: don’t mix it into the monthly budget.
- A target price, separate from the maximum price
- Notary, inspection, transfer duty, and adjustments
- A minimum reserve you don’t touch
Same price, two very different budgets
A worked example
A couple earns $130,000 gross. The ratios allow a mortgage payment of about $3,100 a month, or a loan around $560,000 at the qualifying rate. But they want to keep saving $800 a month, keep a car, and absorb $1,200 of daycare that never enters the ratios. Starting from what they want to pay, $2,300 a month including housing costs, the target price drops to around $430,000. With $60,000 in savings, they set aside $12,000 for the notary, inspection, transfer duty, and adjustments, keep $10,000 in reserve, and $38,000 remains for the down payment. The target price respects all three figures at once: the payment, the costs, and the reserve.
When it does not apply
When the down payment is very large, the payment becomes small relative to income and the constraint moves to the reserve after purchase, not the monthly instalment. In a market where properties sell above asking, a target price set too tight loses every offer; the bidding margin then has to be set in advance, not discovered in the heat of the moment. And if your income is certain to rise within the year, say the end of a residency or a probation period, the budget can anticipate part of the increase, provided the lender recognizes it too.
What is paid on signing day, and right after
The closing-cost envelope is the one people underestimate the most. At the notary: fees and registration costs, $1,500 to $2,500 depending on the file. Adjustments: the share of municipal and school taxes the seller already paid for the rest of the year, sometimes the heating oil or propane left in the tank. Home insurance, required before funding. If the mortgage is insured, the provincial tax on the CMHC premium is paid in cash at the notary, while the premium itself is added to the loan. Then, a few weeks later, the transfer duty bill arrives from the municipality: several thousand dollars, due in a single payment. And the move, the first repairs, the curtains. Put all of it on one line and keep it separate from the down payment. The site’s closing-cost calculator exists for exactly that.
How Mathieu can help
Sources and review
FCAC — Planning to buy a home. Reviewed August 12, 2026.