Rent-to-Own is a homebuying strategy that lets you move into a home now and buy it later. A portion of your monthly payment builds your down payment while you work on your mortgage readiness through credit repair and debt repayment.

It’s ideal for people who:

• Have good income but don’t qualify for a mortgage yet

• Have a small down payment (usually 5%)

• Need time to improve credit or pay down debt

• Want to stop wasting money on rent

• Don’t have the necessary closing costs to complete a purchase

The monthly payment works very similar to a payment with the bank on an approved mortgage.  Basically, here is a quick idea on how this number works – we take the price of the house and subtract your down payment amount.  This would be the mortgage if you qualified on your own.  The monthly payment is based on Scotiabanks interest rate for a mortgage similar to the above.

You choose a home within your approved budget, an investor buys it for you, and you move in under a Rent-to-Own agreement. You rent the home for 3–4 years while saving and preparing for a mortgage. At the end, you buy the home at a pre-set price.

That’s a common misconception! While Rent-to-Own can be more flexible than traditional mortgages, you do need a down payment to get started—typically around 5% of the home price.

Here’s why: Your down payment becomes your initial equity in the home and is part of what helps you qualify for a mortgage at the end of the program. It shows you’re serious, committed, and ready to invest in your future. The good news? Every dollar you put in is working for you—not for a landlord.

Unlike a traditional rental where the money is gone, your down payment plus a portion of each monthly payment gets credited back to you at the end of the program when you successfully purchase your home, building toward your full down payment.

So yes, you do need some savings to get started—but we help make that money grow faster than it would sitting in a savings account.

The budget in a rent-to-own is based on the same principles used by the bank:  The Stress Test.  We take your income, mulitple it by 4.5 times and add your down payment to come up with a budget that should help you enter and exit a rent-to-own.

Yes! You shop for a home within your approved budget—just like any other buyer. The goal is to find a home you love and can afford to own at the end of the program.

Most Rent-to-Own programs require a minimum 5% initial down payment, based on the home price you’re approved for. There are no closing costs upfront or fees in a program like ours.

Yes, maintenance and repairs are your responsibility just as if you had a bank mortgage. Rent-to-Own is a path to ownership, so you’ll start taking on homeowner-like responsibilities from day one.

No. Many Rent-to-Own homebuyers are rebuilding credit which is what the program is all about.  You get time to repay debt, repair, build or establish your credit. What’s more important is that you have a stable income, some savings, and a willingness to follow the plan to become mortgage-ready.

• Path to Homeownership: Provides a structured way to work towards owning a home.
• Time to Improve Finances: Allows time to save for a down payment and improve your credit score.
• Lock in Purchase Price: You may be able to lock in the purchase price, protecting you from future market increases.
• Test Drive the Home: You get to live in the home before deciding to buy it.
• Build Equity (Potentially): A portion of your rent may go towards your future purchase.

Check out our blog post for more information on the pro’s and con’s of a rent-to-own.

• Higher Monthly Costs Than Typical Rent: Rent payments are often higher than market rents as this is a mortgage that is taken out to purchase you at home at today’s prices.  Rent is usually based on the mortgage owed on a home purchased at a lower purchase price and years before now.
• Non-Refundable Fees: The option fee or downpayment is typically non-refundable if you decide not to buy or can’t secure financing.
• Loss of Rent Credits: If you don’t buy the home, you usually lose any accumulated rent credits.
• Property Value Fluctuations: If the home’s value decreases, you might be stuck paying a higher, pre-agreed price.
• Repair Responsibilities: You are responsible for maintenance and repairs during the rent-to-own term, which is not the case with standard rentals.
• Financing Isn’t Guaranteed: You still need to qualify for a mortgage at the end of the lease term. If you can’t, you may lose your option fee and rent credits, and in a lease-purchase agreement, you could face legal issues.  It is important to note that this requires you to work to improve your situation so you can qualify for a mortgage.  Doing what you were doing before the rent-to-own (which is usually not proactively taking you towards a mortgage) will not work in a rent-to-own.  Use the support that is offered and always ask for help and guidance.
• Potential for Scams: It’s crucial to work with reputable companies or individuals and have the agreement reviewed by a lawyer.
• Renovation Restrictions: There may be limitations on any changes or renovations you can make to the property during the lease period.

Rent-to-Own is 100% legal in Canada. However, not all programs are equal. Make sure you work with a reputable company that provides written agreements, promotes working with a lawyer to review agreements and is open to supporting you along the way—like Clover Properties.

• Option Fee: The upfront, non-refundable payment for the option to purchase (aka downpayment)
• Monthly Rent: A portion of which may include rent credits for on-time payments
• Maintenance/Repair Costs
• Legal Fees: For reviewing the agreement.
• Future Closing Costs: If you proceed with the purchase, you’ll be responsible for standard closing costs like land transfer tax, legal fees for the purchase, and potentially a home inspection.

This is not a rental so you don’t pay rent. You pay a monthly payment that covers the expenses of the mortgage that has to be taken out to purchase the home.  The monthly payment includes property tax and house insurances as well as the mortgage expenses.  The big different is that a portion of your payment (typically $200–$800/month depending on the price of the house) is credited toward your future down payment when you make your payments on-time each month.

No, we do not charge you any fees.  Your downpayment is 100% applied to your Rent-to-Own and credited back when you successfully complete the program and take ownership of the house.  You also don’t have to pay closing costs until you are ready to purchase the house at the end of the Rent-to-Own term.  You do, however, have one cost upfront and this is to pay for the home inspection.

You apply for a mortgage, use your saved-up credits as a down payment, and purchase the home. The title transfers to you, and you become the legal owner.

There are two parts:

• Lease Agreement: Protects you from being evicted if you are late on a payment and outlines that tenant’s insurance is required.

• Option to Purchase: Locks in your future right to buy the home at a pre-determined price, outlines your monthly payment, payment schedule and the credits you would receive when you make your monthly payment on-time.

Some programs may offer an extension, but it’s not guaranteed. That’s why it’s important to follow the financial plan and work closely with your coach or mortgage advisor during the term to ensure you are repairing your credit, saving for a bigger down payment and closing costs.

While general contract and tenancy laws in Ontario apply, there isn’t a specific, separate regulatory framework exclusively for Rent-to-Own agreements to the same extent as traditional rentals or real estate purchases. It’s crucial that the agreement clearly outlines all terms and conditions and complies with existing provincial laws. Due to the complexity and potential risks, seeking legal advice from a lawyer familiar with Ontario real estate and contract law is essential.

Yes, but you will lose your initial downpayment and monthly credits. There could also be legal action taken against you as the agreements are very much legal. Each program is different, so review your contract carefully and speak with a real estate lawyer before signing.

No. The home is purchased for you by an investor at the beginning. At the end of the term, you buy the home and own it outright—no co-ownership, no shared equity, just your home.

Yes, this is mandatory and proof must be shown at the beginning of the term and each year that the insurance is renewed.