With homeownership feeling increasingly out of reach for many Canadians, alternative homeownership solutions are emerging to help individuals enter the real estate market. The housing market continues to set record highs, and it now takes the average Canadian urban homebuyer over two decades to save for a traditional down payment. Innovative models can increase accessibility, helping renters move towards long-term homeownership

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Housing co-operatives

Housing co-operatives, or co-ops, are incorporated legal associations that provide at-cost housing for their members. Residents are shareholders, meaning they have a say in the co-op's operations. When residents sell their share, they typically receive a limited return on their initial investment. In Canada, many existing housing co-ops date back to the 1970s and 1980s. However, new forms of co-ops are emerging to provide updated housing solutions that cater to today's affordability challenges.

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Lease purchase programs

Lease purchase programs enable participants to lease a home that is initially owned by a local housing finance agency or nonprofit organization. Over time, residents can purchase the home by assuming the unpaid mortgage balance after demonstrating consistent and timely lease payments. This model provides a gradual path to ownership for individuals who may not have access to a large upfront down payment but are financially stable enough to work towards purchasing the property.

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Shared equity mortgages

Shared equity mortgages offer another solution to overcome down payment challenges. In this model, buyers receive a loan to cover a portion of their down payment, typically 10-15% of the home's purchase price. The loan is payment-free until the home is sold, at which point the borrower repays the initial loan plus a proportional share of the appreciation in the home's value. This model allows homebuyers to access a traditional mortgage with lower monthly costs and a larger down payment.

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A new homeownership model: Key

Key offers a modernized path to homeownership tailored for today's housing market. With Key's program, participants can move into their chosen home with a 2.5-5% down payment. Over a 5-year term, participants benefit from increases in the home's value and work towards taking over full ownership of the home. This model is designed to make homeownership more accessible without the barrier of a significant upfront cost. Learn more about how Key's program works here.

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