Rent-to-Own Homes in Canada 2024

This Page's Content Was Last Updated: January 23, 2024
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What You Should Know

  • Rent-to-own homes allow you to rent the home with an additional option to buy the home and can be an option for those who want to buy a home but haven't saved up enough for a down payment
  • A portion of your monthly rent payments, called rent credits, will be set aside and go toward the purchase of the home as an eventual down payment.
  • Rent-to-own companies allow you to choose any home on the market with which you want to enter into a rent-to-own arrangement, and you can even lock in a home purchase price with the rent-to-own agreement.
  • You may lose some or all of your paid rent credits and initial down payment amount if you choose not to purchase the home.
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With home prices skyrocketing across Canada, purchasing a home is becoming a distant dream for many. In this scenario, programs such as rent-to-own can be helpful in fulfilling the dream of home ownership. With the help of a rent-to-own program, you can start renting a home that you want to purchase with the option to buy it in the future.

What is Rent-to-Own?


A rent-to-own agreement gives you the option to purchase the home you are renting either during or after your lease expires. With a rent-to-own agreement, the landlord is legally bound to sell the home to you and cannot sell the home to anyone else during the option period of the agreement. The option period is the time during which you have the option to purchase the home. A portion of the rent paid each month goes towards the down payment for the home purchase.

Rent-to-own homes can be an alternative for those interested in buying a home but cannot do so in a conventional way, such as those who don't have enough down payment or those who cannot qualify for a mortgage due to low credit scores.

Rent-to-Own Companies in Canada

RTO CompanyAreas ServedTermsMinimum Option Fee / Downpayment
Requity HomesRequity HomesNorthern ON (Sudbury, Thunder Bay, North Bay, Sault Ste. Marie, SK (Regina, Saskatoon), AB (Edmonton), MB (Winnipeg)2 - 5 years2% of home purchase price
Clover PropertiesClover PropertiesON, QC, AB2 - 4 years$15,000 for homes up to $450,000 or 5% for homes over $450,000
HOS FinancialHOS FinancialON, QC, AB, NSN/AGreater of $10,000 or 3% of home purchase price
Rent to Own Homes GTARent to Own Homes GTAON2 - 5 years5% of home purchase price
Fraser Valley Rent 2 OwnFraser Valley Rent 2 OwnFraser Valley2 - 3 years5% of home purchase price
Jaag PropertiesJaag PropertiesON2 - 4 years3% of home purchase price
GVC Property SolutionsGVC Property SolutionsBC2 years on averageFrom 0% of home purchase price
HomesyHomesyGreater Toronto and Hamilton Area2 - 4 years5% of home purchase price

How does Rent-to-Own work?

Renting to own a home has two parts — a rental agreement and a rent-to-own agreement. The arrangement works similarly to a rental agreement where you pay the monthly rent to the landlord; however, a portion of the rent goes towards an eventual down payment for the home purchase. The portion of the rent that is set aside for the downpayment is known as a 'rent credit.'

Rent-to-own contracts generally require you to make an upfront payment of 1% to 5% of the purchase price, known as an 'option fee, 'option to purchase deposit,' or a 'downpayment.' This non-refundable deposit gives you the option to buy the home and is applied to the purchase price if you decide to buy the home.

Rent-to-own agreements tend to have a set timeline, which typically ranges between two to five years. You can also lock in a purchase price with the agreement.

Types of Agreements

There are two types of rent-to-own agreements:

  • Lease-Option Agreement:Also known as option-to-purchase agreements, you are given the option to purchase the home in the future; however, you are not obligated to purchase the home. This means you can walk away at the end of your lease without any additional penalties.
  • Lease-Purchase Agreement:In a lease-purchase agreement, you agree to purchase the home at the end of your lease. Failure to purchase the home, such as if you are not able to qualify for a mortgage or if you have changed your mind, can result in penalties.

Whether you sign a lease-option or lease-purchase agreement, rent credits will be accumulated to be eventually applied toward the principal of the house. Should you choose not to purchase the home, you will lose the rent credit that you have built up and may face penalties depending on the type of contract.

Example of Rent-to-Own Process

Let’s say that you found a home listed on the market for $400,000 that you would like to purchase but were declined for a mortgage. You still want to purchase the home, so you enter into a rent-to-own agreement with a rent-to-own company. The rent-to-own (RTO) company sends you two agreements, a lease agreement for a term of three years and an option-to-purchase agreement (lease-option), which will set a home price and rent credits rate. The agreement details would look like this -

Current Price: $400,000
Lease Tenure: 3 Years
Agreed Purchase Price: $440,000 (assuming approximately 3% annual price increase)
Option Fee (paid upfront): 2% of Purchase Price = 2% x $440,000 = $8,800
Amount Owing After 3 Years: $440,000 - $8,800 = $431,200
Min. Downpayment Required: 5% x $440,000 = $22,000
Min. Rent Credit Required Based on Min. Downpayment: $22,000 - $8,800 = $13,200
Min. Monthly Rent Credit Required: $13,200 / 36 = $367
Monthly Rent Payment: $2,000 (based on the marker rates)
Min. Monthly Payment Required: Rent + Rent Credits = $2,367

At the end of the three years, you will have $8,800 from the deposit and $13,200 from the rent credits to apply toward the purchase price of the home, and you will have to get a mortgage for the remaining $418,000. If you choose not to buy, you will lose the deposit and the rent credits.

In the above example, the monthly rent credit calculation is done based on the minimum downpayment amount; however, the landlord may require you to make a larger monthly rent credit payment.

Rent to Own Agreements

A rent-to-own agreement will include terms that have been agreed upon and will also outline your responsibilities. A typical rent-to-own agreement will contain at least the following items:

  • Description of the property, such as the address
  • Information about rent, such as the monthly payment amount and the total amount of rent to be paid over the contract term
  • Who is responsible for what, such as who will pay for utilities, property taxes, maintenance, and repairs
  • Important dates, including the date of possession by the tenant, the last day that the client can exercise their right to buy the home from the rent-to-own company
  • The initial down payment amount, also known as the option consideration or advance fee
  • The total purchase price, along with rental credits and other credits

Who Is Rent-to-Own Ideal For?

Rent-to-own programs can be helpful for individuals and families who want to purchase a home but can’t do so because they don’t have enough downpayment saved, as the rent credits saved through the program are applied to the downpayment of the homes.

Rent-to-own programs can also be useful for those who cannot qualify for a mortgage because they do not meet credit requirements, such as immigrants and those with bad credit. Such persons can work on improving their credit scores over the course of the program so that they qualify for a mortgage at the end of the program. Self-employed individuals who don’t qualify for standard mortgages can also opt for rent to own and save up a sizeable down payment over the course of the program.

Home Co-Ownership

One alternative to rent-to-own is through home co-ownership programs, such as Ourboro. Instead of renting, a group can pool their resources to purchase a home together. In the case of Ourboro, you'll co-own a home with them, with Ourboro contributing a certain amount towards the down payment.

Home co-ownership programs can be beneficial for those who don't have enough money for a down payment on their own. Learn more about down payment assistance programs and how you can take the first step toward home ownership.

Advantages and Disadvantages of Rent-to-Own

While rent-to-own can give you the opportunity to buy when you cannot qualify for a purchase now, it comes with some restrictions compared to purchasing a home outright. The property is still owned by the landlord, which means that you will have to follow the landlord's rules. Violating your lease, such as having pets when your landlord does not allow pets, might mean that your right to purchase agreement will become null and void, meaning that you will lose your option fee and rent credits deposit. Listed below are all the advantages and disadvantages of rent-to-own programs.

Advantages and Disadvantages of Rent-to-own Homes

How to Find Homes for Rent-to-Own?

While you might be able to negotiate a rent-to-own agreement for properties currently being rented, you can also rent-to-own homes currently listed for sale. Some of the ways you can set up a rent-to-own agreement are as follows:

  • A homeowner looking to sell their house might be open to a rent-to-own option since it will allow them to earn rental income or lock in a higher home selling price in a rent-to-own contract.
  • Some rent-to-own companies allow you to choose any home on the market that you wish to rent-to-own. These rent-to-own companies will limit you to a certain home price and down payment that you are eligible for. You can then select a home listed on the market within those limits.
  • If you use a local rent-to-own company, you may be able to purchase homes anywhere the company allows you to. They may also have their own catalogue of listings, which signifies that these are their investor’s properties that may have a lower down payment requirement or lower fees.

Most local rent-to-own companies only operate within a certain city or region. For example, a search for “rent-to-own homes near me” will give you results from local rent-to-own home companies. However, you aren’t limited to just rent-to-own homes in your local area, as national rent-to-own companies operate throughout Canada.

Canadian Association of Rent to Own Professionals (CAROP)

CAROP is a professional association that represents the rent-to-own industry in Canada. In order to become a member, rent-to-own operators must pass an application process that includes a review of their operations. CAROP members must meet specific eligibility criteria and adhere to the CAROP Code of Conduct. This code includes a commitment to working in the client's best interest, having training in rent-to-own operations, and having a credit coaching component in their rent-to-own program.

While rent-to-own companies in Canada are not required to be a CAROP members, choosing a CAROP member for your rent-to-own home ensures a certain level of service and professionalism. Knowing that you're working with a reliable and trustworthy business will give you peace of mind.

Rent to Own Ontario

Rent to Own Toronto
JAAG Properties IncClover Properties
Rent to Own Canada (RTOC)Rent to Own Homes GTA (Say No to Rent)
HOS FinancialRed Door Home Solutions
Rent-to-Own SolutionsChilkoot Homes

Rent to Own British Columbia

Rent to Own Vancouver
RTO HomesGVC Property Solutions
Tuza Investments

Rent to Own Alberta

Rent to Own Calgary
Requity HomesReal Suite Assets Inc.
Peak Housing SolutionsASAP Housing Solutions
Rent to Own Edmonton
EP HomesRequity Homes
911HomesQD Home Quest
Chilkoot Homes

Rent to Own Quebec

Rent to Own Montreal
EQ8 Lease to Own ProgramRTO MONTRÉAL
Breneka Solutions - Solutions Immobilières Breneka

Rent to Own Manitoba

Rent to Own Winnipeg

Rent to Own Saskatchewan

Rent to Own Saskatoon
Westbow Construction SaskatoonBraveya Homes Saskatoon
Rent to Own Regina
KD Properties
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