By Mohsin Lakhani · Benson Crew Real Estate, REAL Broker Ontario Ltd., Brokerage
Your condo equity becomes your next down payment through a straightforward calculation: your sale price, minus your remaining mortgage balance, minus selling costs, equals what you actually walk away with — and that number is often larger than sellers expect once they see it laid out.
This is the number your condo actually sells for, not the number you paid or what you assume it's worth. A current market evaluation gives you a realistic estimate before you list.
Whatever you still owe on your mortgage comes off the top. If you've owned for several years, this balance is likely meaningfully lower than your original purchase price, especially if you've been making regular payments.
Real estate commission, legal fees, and any closing adjustments come out of your proceeds before you see a final number. Budgeting roughly 5–6% of your sale price for these combined costs is a reasonable starting estimate, though your specific numbers may vary.
Whatever remains after those deductions becomes your down payment on whatever's next. For many first-time sellers who bought several years ago, this is enough to fund a genuine down payment on a freehold home — not just a marginally larger condo.
A condo purchased years ago for $450,000, now selling for $650,000, with a remaining mortgage balance of $320,000 and estimated selling costs of $35,000, leaves roughly $295,000 in proceeds. Applied toward a freehold purchase in the $850,000–$950,000 range, that's a strong down payment — potentially avoiding CMHC insurance premiums entirely, depending on the final purchase price.
Whatever your equity doesn't cover, your mortgage pre-approval fills in — which is why getting pre-approved for your next purchase before you list is worth doing early, so you know your real number rather than guessing.
No — you can and should get pre-approved before listing, so you know your realistic budget for the next purchase.
That's not a requirement — minimum down payments are lower than 20%. The 20% threshold only matters for avoiding CMHC mortgage insurance premiums.
It's possible with careful coordination, though most sellers build in some buffer. Bridge financing is also an option if the timing doesn't align perfectly.
A well-researched evaluation should be close, but the final number depends on actual buyer interest and market conditions at the time you list.
This post is provided for general informational purposes only and does not constitute financial advice. Every situation is different — get a free, no-obligation equity snapshot specific to your property.