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12 Oct

Pros and Cons of Condos with Post-Tension Cables

Mortgage Tips

Posted by: Maria Solverson

Condos are built using various construction methods, and each have their benefits and limitations. One method you might come across while condo shopping is post-tension.

This low-cost technique for reinforcing concrete works by placing prestressed steel cables in plastic sleeves within concrete. The cables are pulled tight (tensioned) to add strength.

If you’re questioning whether a condo with post-tension cables is right for you, here are key pros and cons to help you make an informed decision.

Pros

Versatile design – Because fewer supports are required, post-tension cables allow for condo buildings to have more versatile designs.

Size – Fewer supports also make longer spans possible, which can mean larger units.

Cons

Maintenance costs – Post-tension cables run the risk of deterioration and corrosion, which can lead to costly repairs.

Insurance requirements – Because expensive maintenance is more likely, many lenders will require you to have mortgage insurance in place, regardless of whether you will have a conventional mortgage (at least 20% down payment, which does not typically require mortgage insurance) or not (less than 20% down, which always requires mortgage insurance).

Reduced mortgage insurance and lender options – Only a select few mortgage insurers provide coverage on a condo with post-tension cables. This will limit you to holding a mortgage with the lenders that these insurers work with. Some lenders will not consider financing units with post-tension cables.

Mortgage Insurance Options

As of this writing, the only insurers who will consider a building with post-tension include the Canadian Mortgage Housing Corporation (CMHC) and Canada Guaranty.

CMHC will insure a mortgage for buildings built between 1970 and 1985, and Canada Guaranty will only provide mortgage insurance for buildings built in 2001 or later.

Both companies will require documentation in order to provide you with mortgage insurance. Documentation is requested on a case-by-case basis. Documents might include:

  • Engineer reports on the building
  • Records of building maintenance work

Key Takeaways

  • Some lenders will not finance units in buildings with post-tension. Those who do provide financing are very likely to require mortgage insurance regardless of your down payment’s size.
  • If you need mortgage insurance on a condo with post-tension cables, you will be limited to using CMHC or Canada Guaranty.
  • You will also be limited to holding a mortgage with the lenders that these insurers work with.
  • You will be required to submit documentation about the building to your insurer.

Working With a Condo Document Specialist

Deciding whether to purchase a condo with post-tension cables will come down to your property priorities, your financial capacity, your risk tolerance, and the building itself.

For example, you might consider a building with post-tension because it’s in an incredible location or has value-adding amenities like underground parking.

But you might avoid such buildings because of potential repair and maintenance expenses or the limited insurers and lenders you can work with. Keep in mind that all properties carry risks for repairs and maintenance—like roofing, HVAC, and plumbing—that can be just as expensive. Some risk in this area is unavoidable.

To best know what you can expect in terms of maintenance costs, work with a condo document specialist.

They will provide you with insight into the building’s management, bylaws, financial health and more by reviewing documents such as:

  • The minutes from condo board and annual general meetings for comments related to post-tension concrete.
  • The building’s audited financial statements, operating budget and reserve fund study, which will include details about repairs, funding, and maintenance needs.
  • A Post-Tension Cable Report that includes an engineer’s feedback on the building’s condition.

If you find a condo you love in a building with post-tension, contact me to confirm your mortgage options and insurance policies.