What is a shared equity mortgage?

A shared equity mortgage is a financing arrangement where a third party (government or private company) contributes to your down payment or purchase price in exchange for a share of your home''s future appreciation (or depreciation). You get a lower mortgage amount and lower monthly payments, but you share the profit when you sell or the equity agreement ends.

Is the First Home Savings Account (FHSA) a shared equity program?

No. The FHSA is a tax-advantaged savings account that lets first-time buyers save up to $40,000 for a down payment with tax-deductible contributions and tax-free withdrawals. It is not a shared equity program — you keep 100% of your home''s equity. The FHSA is a separate program that can be used alongside shared equity if you qualify for both.

What happened to the First-Time Home Buyer Incentive?

The federal First-Time Home Buyer Incentive (FTHBI), launched in 2019, was discontinued on March 21, 2024. The program had very low uptake — fewer than 25,000 applications over its life — because the income and purchase price caps were too restrictive for Canada''s expensive housing markets. As of 2026, there is no active federal shared equity program.

Are there any shared equity programs still available in Canada?

Yes, but they are primarily provincial, municipal, or private. Some options include: provincial down payment assistance programs, Habitat for Humanity homeownership programs, private shared equity companies (e.g., Ourboro, Key), and some employer-sponsored housing programs. Availability and terms vary significantly by location and eligibility.

Do I have to pay back a shared equity loan?

Yes — shared equity must be repaid, typically when you sell the home, after a set number of years (e.g., 25 years), or when you choose to buy out the equity partner. The amount you repay is based on the partner''s percentage of the home''s current value — not the original contribution. If your home appreciated, you repay more. If it depreciated, you repay less.

Shared Equity Mortgages in Canada 2026: Programs, Pros & Cons

Shared equity programs help Canadians buy homes by providing part of the down payment or purchase price in exchange for a share of the home’s future value. Here’s a comprehensive look at how these programs work, what’s currently available, and whether they make sense for you.

How shared equity works

In a shared equity arrangement, a partner contributes to your home purchase and receives a share of the home’s equity — both gains and losses.

The basic structure

Component	Traditional Mortgage	Shared Equity Mortgage
Your down payment	5%–20%	5%–20%
Equity partner contribution	$0	5%–10% of purchase price
Mortgage needed	80%–95%	70%–85%
Monthly payment	Higher (larger mortgage)	Lower (smaller mortgage)
Equity you own at purchase	100% (minus mortgage)	90%–95% (partner owns rest)
Equity at sale	100% of appreciation	90%–95% of appreciation

Example: $500,000 home purchase

Scenario	Without Shared Equity	With 10% Shared Equity
Purchase price	$500,000	$500,000
Your down payment (5%)	$25,000	$25,000
Partner contribution	$0	$50,000 (10%)
Mortgage needed	$475,000	$425,000
Monthly payment (4.50%, 25-yr)	$2,610	$2,335
Monthly savings	—	$275/month

What happens at sale (after 10 years)

Outcome	Home Sells for $700,000 (+40%)	Home Sells for $500,000 (flat)	Home Sells for $400,000 (–20%)
Partner’s 10% share	$70,000	$50,000	$40,000
Your proceeds (after mortgage)	Approx. $340,000	Approx. $175,000	Approx. $60,000
Cost of shared equity	$20,000 (partner gained $20K on their $50K)	$0 (partner gets back original)	–$10,000 (partner absorbs $10K loss)

Key insight: If your home appreciates significantly, the shared equity partner earns a return that may exceed what you’d have paid in mortgage interest on the larger loan. If prices are flat or decline, shared equity works in your favour.

Current shared equity programs in Canada (2026)

Federal programs

Program	Status	Notes
First-Time Home Buyer Incentive (FTHBI)	Discontinued (March 2024)	Low uptake due to restrictive income and price caps
First Home Savings Account (FHSA)	Active — but not shared equity	Tax-advantaged savings account; up to $40,000; no equity sharing
Home Buyers’ Plan (HBP)	Active — but not shared equity	Withdraw up to $60,000 from RRSP; must repay over 15 years

Provincial and municipal programs

Province/City	Program	Type	Details
BC	BC Housing — various programs	Down payment assistance, affordable homeownership	Targets lower-income households; specific developments
Alberta	Attainable Homes Calgary	Shared equity	Reduced purchase price on specific homes; equity share on resale
Ontario	Various municipal programs	Down payment loans and grants	Toronto, Ottawa, Hamilton have programs; income-tested
Ontario	Ontario Renovates	Forgivable loan	For low-income homeowners (repairs, not purchase)
Quebec	Accès Condos	Shared appreciation	Reduced condo prices; equity share arrangement
Manitoba	Manitoba Housing	Affordable homeownership	Income-tested programs in specific developments
Nova Scotia	Down Payment Assistance Program	Interest-free loan	Up to $25,000 for eligible first-time buyers
National	Habitat for Humanity	Sweat equity + affordable mortgage	Zero down payment; below-market mortgage; income-tested

Note: Provincial programs change frequently. Check your provincial housing authority website for the most current information.

Private shared equity companies

Company	How It Works	Equity Share	Availability
Ourboro	Provides 5%–15% of purchase price as co-investment	Shares in appreciation/depreciation proportionally	Ontario (GTA focus)
Key	Down payment co-investment model	Percentage-based equity share	Select Canadian markets
Lotly (formerly Requity Homes)	Rent-to-own with equity building	Builds equity through rent credits	Ontario, BC

How private shared equity differs from government

Feature	Government Programs	Private Shared Equity
Motivation	Increase homeownership	Investment return
Cost to borrower	Generally lower	Higher (private company expects a return)
Income restrictions	Usually income-tested	May be more flexible
Property restrictions	Often limited to specific homes or prices	Broader property eligibility
Equity share	5%–10% typical	5%–20% typical
Repayment term	25 years or at sale	Varies (5–30 years or at sale)
Availability	Limited, often waitlisted	More accessible but newer market

Who qualifies for shared equity

Common eligibility criteria

Requirement	Typical Threshold
First-time buyer	Often required (defined as not owning in previous 4 years)
Household income	Varies by program ($80,000–$150,000 caps for government programs)
Purchase price	Often capped (program-specific)
Property type	Primary residence only
Citizenship/residency	Canadian citizen or permanent resident
Minimum down payment	5% from your own resources
Mortgage qualification	Must qualify for the reduced mortgage amount
Occupancy	Must live in the home (not rental/investment)

The math: is shared equity worth it?

Scenario: $600,000 home, 5% appreciation per year

Year	Home Value	10% Partner Share	Your Equity (90% of value – mortgage)
0	$600,000	$60,000	$30,000 (down payment)
5	$765,769	$76,577	~$194,000
10	$977,337	$97,734	~$405,000
15	$1,247,356	$124,736	~$665,000
25	$2,032,840	$203,284	~$1,350,000

Cost of shared equity vs larger mortgage

At 5% annual appreciation, buying out the 10% equity partner after 10 years costs $97,734 — that’s the $60,000 original contribution plus $37,734 in appreciation. The question is whether that $37,734 is more or less than the interest you saved on the $60,000 smaller mortgage.

Comparison	Shared Equity	Larger Mortgage (no partner)
Extra interest on $60K over 10 years (at 4.50%)	N/A	~$17,000
Appreciation paid to equity partner	~$37,734	N/A
Net cost of shared equity	$37,734	$17,000
Difference	$20,734 more expensive	—

At 5% annual appreciation, shared equity costs more than a regular mortgage. It becomes advantageous only when:

Appreciation is low (under ~2%/year)
You genuinely cannot qualify for the full mortgage amount
The monthly payment reduction makes homeownership possible vs impossible

Break-even appreciation rate

Equity Partner Share	Mortgage Rate	Break-Even Appreciation
5%	4.50%	~3.5%/year
10%	4.50%	~2.5%/year
5%	5.50%	~4.5%/year
10%	5.50%	~3.5%/year

Below the break-even rate, shared equity is cheaper. Above it, a traditional mortgage costs less.

Pros and cons

Advantages

Advantage	Explanation
Lower monthly payments	Smaller mortgage = lower payments
Easier qualification	Lower mortgage amount means easier stress test
Built-in downside protection	Partner shares in losses if home value drops
No monthly interest on partner’s share	Unlike a second mortgage, the partner’s contribution doesn’t charge interest
Enter the market sooner	May make homeownership possible years earlier

Disadvantages

Disadvantage	Explanation
You share appreciation	The biggest cost — in a rising market, this can be significant
Restrictions on your property	May need partner approval for major renovations
Complexity at sale	Must settle with equity partner before completing sale
Limited program availability	Government programs often oversubscribed or discontinued
Buyout cost may be surprising	If home appreciates significantly, buying out the partner is expensive
May restrict refinancing	Some programs require consent to refinance or add a HELOC
Loss of full ownership flexibility	You don’t have 100% control over your asset

Alternatives to shared equity

Alternative	How It Helps	Trade-off
FHSA + RRSP (HBP)	Tax-advantaged down payment savings up to $100K	Takes time to save
Insured mortgage (5% down)	Buy with less down; no equity sharing	CMHC insurance premium (2.8%–4%)
Family gift for down payment	No equity sharing; lenders accept gifted funds	Not everyone has this option
Co-buying with family/partner	Share costs and ownership	Co-ownership brings its own complexities
Rent-to-own	Build equity while renting	Usually more expensive than traditional buying
Buy in a less expensive market	Reduce purchase price entirely	May mean a longer commute or different community
Wait and save	Larger down payment = lower mortgage	Risk of prices rising while you save

Questions to ask before entering a shared equity agreement

Question	Why It Matters
What percentage of appreciation does the partner receive?	Your total cost over time
What happens if home prices fall?	Does the partner absorb their share of losses?
When must I repay or buy out the partner?	10, 15, 25 years? At sale only?
Can I buy out the partner early?	Flexibility to end the arrangement
Who pays for the buyout appraisal?	Could be $300–$500+
Can I renovate without partner approval?	May restrict improvements
Can I refinance or add a HELOC?	May require partner consent
What happens if I want to rent the property?	Most programs require owner-occupancy
Is the partner’s share registered on title?	Affects your ability to borrow against equity
What are the partner’s fees or admin costs?	Some programs charge ongoing admin fees