When you contact an ‘A lender’ (major bank) to get a mortgage of your own, having a larger down payment will make you a more attractive applicant for the bank and may even help lower your mortgage payments.

To protect you further, the eventual purchase price of the home—what you will pay at the end of the RTO period—it set before you ever move in or enter into a contract. That way you know exactly what you’re going to be purchasing your home for, and you’re protected from large spikes in the real estate market.

Since—as an RTO buyer—you’re allowed to make changes and improvements to the home as soon as you move in, you might even find yourself beginning the home ownership process with a significant amount of equity, an enviable situation to be in!

Interested? Learn more by reading my RTO blog or get in touch!

What is Rent to Own (RTO)?

Did you know that Canadians have been taking advantage of rent to own home ownership since the 1970s? That’s roughly fifty years of buying a house with this form of financing.

RTO can have many forms, but I often work with Clover Properties to help RTO buyers begin their journey to home ownership. Much of the information on this page is drawn from information Clover Properties provides to program participants.

In a nutshell, rent to own allows buyers to choose the home they would like to purchase immediately, and buys them time (usually 2–5 years) to become better prepared—financially—to purchase the home themselves.

In the meantime, the home is owned by an investor-buyer who takes on the mortgage in their name. As a new homeowner, the RTO buyer makes monthly rent payments towards the property, as well as a mandatory monthly contribution to a savings plan. At the end of the RTO period, the saved funds (along with a modest deposit) are returned to the buyer and will end up totalling approximately 10% of the purchase price.

Rent to Own at a Glance:

  • Buyers must have a steady income and some down payment. (All earners who will live in the home can qualify together.)

  • A future purchase price is set by Clover Properties before a home is purchased.

  • Once approved for the program and given a budget, buyers work with their REALTOR® to choose the home they want.

  • Clover does not own any properties to try and sell on; you choose your home.

  • Once you move in, buyers are responsible for the running costs of the property but are also able to make changes and improvements.

  • After the pre-set period (2–5 years), buyers should
    be able to qualify for their own mortgage from an
    A Lender and will bring a 10% down payment to
    that process.

Rent to Own is Great For:

  • Newcomers to Canada

  • Those new to their jobs

  • People working on credit repair

  • Buyers coming out of a consumer proposal

  • People who aren’t quite financially ready to buy but who really want to get their foot on the property ladder.

Rent to Own is Not:

  • An easy fix. It can be a great solution for some people, but still requires commitment and, in some cases, financial sacrifice.

  • A scam, though some other programs are absolutely stacked against buyers. Do your due diligence and ask lots of questions before you sign anything!

  • Instant. While we can move quite quickly for qualified applicants, there is an approval process before you’re released to start shopping. Once you’re in your home there is a 2–5-year period before you can go on title.

  • Great for people who want to live in an extremely rural setting. We only work with urban and suburban settings for RTO.

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