top of page

Rent-to-Own Program in Canada

Updated: Apr 5


  1. How Does Rent-to-Own Work in Ontario?

  2. Rent-to-Own Ontario Laws

  3. Eligible Tenant Buyers

  4. How Mortgage Brokers can help you in the Rent-to-Own program?

  5. Program Goals

  6. Benefits

  7. Pre-Approval Info

  8. Contact

With today’s housing prices going through the roof in many city centers across Canada, it can be really tough for people to be able to afford a home. Particularly in markets such as Toronto, Vancouver, and Montreal, where housing prices have been increasing by large amounts over the past few years, being able to afford the listing price has proven to be out-of-reach for many people.

Additionally, getting mortgages approved has also become somewhat challenging, as lenders are more thorough in analyzing compliance with their criteria, and have adopted stricter practices when it comes to determining whether or not borrowers should be approved for mortgages.

Even though mortgage rates have been as low as they have been in recent years, home loans are still difficult to approve due to high down payment prices and strict loan criteria.

So what does a home buyer hope to do? Fortunately, there are other options to take advantage of to make homeownership a reality, such as rent-to-own. This is a creative alternative to buying a home and is a great way to finally become a homeowner.

But what exactly is ‘rent-to-own and how does it work?

How Does Rent-to-Own Work in Ontario?

A rent-to-own arrangement is one in which you pay rent every month to the owner/landlord, just like you would as a tenant. However, with a rent-to-own program, a portion of the rent you pay goes towards your down payment for the purchase if you buy the home down the line. In Ontario, a rent-to-own program allows you to grow your down payment while living in the home as if it was your own.

Rent-to-own programs in Ontario offer homebuyers the chance to be proactive in their purchasing endeavors and take steps to become homeowners despite many obstacles that may have prevented them from buying the conventional way. Poor credit and insufficient funds for a down payment don’t have to be hurdles that prevent you from finally having your name on the title of a property.

Rent-to-Own Ontario Laws

According to Ontario law, two agreements must be entered between you (the buyer) and the landlord: the rent-to-own “option to purchase” agreement and “lease agreement.” Both contracts will need to be signed before access is given to the property, much like a typical lease agreement or purchase agreement in a traditional lease or purchase scenario, respectively.

There are certain terms within these agreements that are worth emphasizing. For instance, the lease term is an essential component of the rent-to-own contract and specifies the fixed term that you will be leasing the property from the landlord or company. Generally speaking, lease terms tend to last anywhere from three to five years in length, depending on the specific situation.

The duration of the lease term should give you enough time to repair your credit (if necessary), putting you in a much better position to get approved for a conventional mortgage the traditional way. At the same time, it gives lots of time for you to accumulate a sizable down payment amount for you to secure a traditional mortgage in the future.

Eligible Tenant-Buyers

This a great opportunity for tenants who wanted to buy a house but still need to improve and meet the lenders' criteria for a conventional mortgage, and also this a good program for:

  • Self-employed

  • New to Canada

  • Increase the credit report

  • People who have declared bankruptcy or consumer proposal, or

  • Those who haven’t been able to save enough money for a good down payment


How Mortgage Brokers can help you in the Rent-to-Own Program?

The mortgage business goes further beyond lucrative results, it helps to materialize individual and family goals, both financial and quality of life. Mortgage Brokers provide personalized mortgage solutions and financial services to support those goals and make them a reality.