At Key we are changing how you own real estate. We’re creating a world where real estate is a source of freedom and prosperity for everyone, where you can start building home equity years sooner. 

We often get questions around our model and one of the most common questions is: “Are you a rent-to-own model?” 

Key is a co-equity model for homeownership, where you become an owner-resident for just 2.5% of the value of your suite. You can live in your suite for as long as you’d like–without ever being locked into a mortgage or requiring a 5-20% downpayment.

While both Key’s co-equity model and rent-to-own models are working towards making homeownership more accessible, there are some very key differences. Hear what Mark McLean, VP, at Key, a 30-year real estate industry veteran past president of the Toronto Real Estate Board and past director of the Ontario Real Estate Association has to say about Key’s co-equity model.

What is a rent-to-own model? 

Rent-to-own models are essentially agreements that allow you to rent a property for a specific length of time with the option of buying the property before your lease runs out. You pay rent throughout the lease and typically an additional premium that will go towards your down payment. 

With rent-to-own you are typically on the hook for nonrefundable upfront fees, ranging between 1-5% of the purchase price. Also, depending on your contract, you may also be on the hook for all the maintenance and property repairs throughout your lease (if you’re wondering, homeowners should be prepared to set aside 2-4% of your home’s value every year towards repairs and maintenance). 

When your lease agreement runs out, you’ll need to qualify for a mortgage and put together the money for the down payment. Should you decide not to purchase the property, you may actually lose all of the equity (money that would have gone towards the down payment) in the home. 

So, how does Key’s co-equity model work? 

At Key, your initial 2.5% contribution can be cashed out (with 75 days’ notice) when you are ready to move out–if the value of your suite has appreciated, so will your home equity investment. Plus, the amount of equity you co-own of your suite provides a benefit that helps to reduce your monthly payment. 

At Key, you never have to qualify for a mortgage or worry about paying a 5-20% down payment. Try our calculator to get a better idea of how our co-equity models works and what it would mean for you.