Between moving in and closing, a pre-construction condo buyer pays the builder a monthly fee. It looks like a mortgage payment. It is nothing like one.
“I was travelling for work during my closing, and everything was handled by email and e-signature without a hitch.”J.F. · Home purchase · Thunder Bay
Shared with permission. Initials changed to protect client privacy.
Enter the unpaid balance, the interest rate from your agreement, and the estimated monthly tax and common expenses.
Interim occupancy only applies to pre-construction condos. See our closing cost calculator → for what happens once the building actually registers.
The calculator above does the actual math for you.
The fee is interest on the portion of the purchase price you have not yet paid, plus an estimate of the monthly property tax, plus an estimate of the monthly common expenses. The Condominium Act, 1998 limits it to those three things, which is a real protection — but it does not cap the interest rate.
That rate comes from your agreement of purchase and sale. It is frequently well above what you could borrow at, and it is one of the few numbers in a builder agreement that is genuinely negotiable before you sign.
None of this reduces your purchase price. You are not paying down a mortgage. You are renting your own unit from the builder until the condominium registers.
Registration is out of your hands — budget for the whole period.
Interim occupancy runs until the condominium is registered, and registration depends on the municipality, the surveyor and the builder — not on you. Buyers routinely spend six months to two years in interim occupancy →, paying a fee that builds nothing.
You cannot get title, you cannot get a mortgage advance, and in most agreements you cannot lease the unit out without the builder's written consent →. Budget for the whole period, not for the closing date on the paperwork.
Say $600,000 of your purchase price is still unpaid, your agreement sets the occupancy interest rate at 6.0%, and the builder estimates $350 a month in property tax and $520 a month in common expenses:
Over a one-year occupancy period, that is more than $46,000 paid before you own anything. Run your own balance and rate in the calculator above — and check the rate in your agreement before you sign, because it is often negotiable.
A monthly payment to the builder for the period between taking possession of a pre-construction condominium and the registration of the condominium, when title can finally transfer. It is made up of interest on the unpaid purchase price, estimated property taxes and estimated common expenses.
No. None of it is applied to the purchase price and none of it builds equity. It is closer to rent than to a mortgage payment.
Until the condominium is registered, which is outside the buyer's control. Six months to two years is common, and the fee is payable throughout.
Usually only with the builder's written consent, which many agreements withhold or charge for. Check the clause before you rely on rental income to cover the fee.
Book a 20-minute call with a real estate lawyer — $150, HST included, credited in full toward your file if you retain us (once payment is received), paid by Interac e-transfer.
You’ll pay $150 by Interac e-transfer on the next screen to confirm your time.