Home equity sharing programs let you buy a home with less of your own money. An investor or company puts up a portion of the down payment, and in exchange, they receive a share of the home’s future value change. These programs are relatively new in Canada and are an alternative to traditional mortgages, CMHC insurance, or the discontinued federal shared equity program.
How equity sharing works
| Step | What Happens |
|---|---|
| 1. Apply | You apply to an equity sharing company and qualify based on income, credit, and property |
| 2. Partnership | The company contributes funds toward your purchase (typically 5%–15% of the home price) |
| 3. You buy the home | You own the home, live in it, maintain it, and make all mortgage payments |
| 4. Exit event | When you sell, refinance, or reach the agreement end date, you settle with the partner |
| 5. Share the gain (or loss) | The equity partner receives their original contribution plus their share of appreciation |
Equity sharing vs traditional down payment
| Factor | 100% Your Down Payment | With Equity Sharing Partner |
|---|---|---|
| Home price | $600,000 | $600,000 |
| Your down payment | $60,000 (10%) | $30,000 (5%) |
| Equity partner contribution | $0 | $30,000 (5%) |
| Mortgage amount | $540,000 | $540,000 |
| CMHC insurance | $16,740 (3.1%) | Potentially avoided if combined = 10%+ |
| Monthly payment | ~$2,850 | ~$2,850 |
| If home appreciates 20% to $720,000 | Your equity: $180,000 | Your equity: ~$150,000 (partner takes ~$30,000 + share of gain) |
The core trade-off: You buy sooner with less cash, but give up some future upside.
Canadian equity sharing companies
Ourboro
| Feature | Details |
|---|---|
| Contribution | Up to $250,000 toward your home purchase |
| What they receive | Share of future appreciation |
| Property types | Residential — detached, semi, townhouse, condo |
| Location | Currently focused on the Greater Toronto Area |
| Agreement term | Up to 15 years |
| Buyout allowed | Yes — through refinancing or cash payment |
| Monthly cost | No monthly fees to the equity partner |
| Maintenance | Your responsibility (as the homeowner) |
Key Living
| Feature | Details |
|---|---|
| Contribution | Varies based on property and applicant profile |
| What they receive | Share of future appreciation |
| Focus | Helping buyers who are close to qualifying but need down payment help |
| Location | Select Canadian markets |
Comparison with the discontinued federal program
| Feature | First-Time Home Buyer Incentive (Ended 2024) | Private Equity Sharing (Ourboro/Key) |
|---|---|---|
| Provider | CMHC (federal government) | Private companies |
| Contribution | 5%–10% of home price | Varies (up to $250K) |
| Price cap | $722,000 (up to $950K in select cities) | Market-based, higher limits |
| Repayment | Return contribution + share of gain after 25 years or on sale | Similar — return + share of gain |
| Status | Discontinued (March 2024) | Active |
When equity sharing makes sense
| Situation | Why It Helps |
|---|---|
| You have steady income but limited savings | Access the market sooner instead of waiting years to save |
| Home prices are rising faster than you can save | Missing out on appreciation costs more than sharing it |
| You need to avoid CMHC insurance | Combined down payment may reach 20%, eliminating the insurance premium |
| You’re buying in an expensive market | The gap between your savings and the required down payment is large |
| You have a short timeline | Job relocation or family needs require buying soon |
When equity sharing doesn’t make sense
| Situation | Why |
|---|---|
| You can make the down payment yourself | No need to share appreciation |
| Home prices are expected to decline | The partner shares in losses, which is an advantage — but you may be better off waiting |
| You plan to hold the home for 20+ years | The cost of shared appreciation compounds over time |
| You value maximizing wealth accumulation | Every dollar of appreciation you share is a dollar you don’t keep |
| The agreement terms are unclear | Never enter an equity sharing agreement without full legal review |
The math: When does equity sharing cost more than CMHC insurance?
Scenario: $600,000 home, 5% personal down payment + 5% equity partner
CMHC route (5% down, no equity partner):
| Cost | Amount |
|---|---|
| CMHC premium (4.0% on $570K mortgage) | $22,800 |
| You keep 100% of appreciation | — |
Equity sharing route (5% personal + 5% partner = 10% combined):
| Cost | Amount |
|---|---|
| CMHC premium (3.1% on $540K mortgage) | $16,740 |
| Equity partner’s share of appreciation after 5 years (home up 15%) | ~$13,500 + $30,000 return = $43,500 |
| Net cost vs CMHC | Higher if appreciation is strong |
The breakpoint: If the home appreciates significantly (15%+ over 5 years), CMHC insurance is often the cheaper option. If appreciation is modest (under 10%), equity sharing can be cheaper because the partner’s share of the smaller gain is less than the CMHC premium you avoided.
Legal considerations
| Factor | Details |
|---|---|
| Legal review | Essential — have a real estate lawyer review the equity sharing agreement before signing |
| Title registration | Equity sharing may or may not be registered on title — understand how the partner’s interest is secured |
| Mortgage lender approval | Your lender must agree to the equity sharing arrangement; not all lenders will |
| Renovation rights | Confirm whether you can renovate freely and how renovation value is handled |
| Buyout terms | Understand the exact formula for buying out the partner at any point |
| Default provisions | What happens if you miss mortgage payments or the partner calls the agreement |
| Tax implications | The equity partner’s share is typically not a taxable event for you (consult a tax advisor) |