Between moving in and closing, a pre-construction buyer pays the builder a monthly fee. It looks like a mortgage payment. It is nothing like one.
Condominium Act, 1998. The interest rate is set by your agreement of purchase and sale, not by statute. Reviewed 28 August 2026.
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.
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 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 consent. Budget for the whole period, not for the closing date on the paperwork.
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.
Open your file tonight — a licensed Ontario lawyer will confirm your exact Land Transfer Tax and closing costs in writing.