Being stuck renting when you want to be owning is frustrating to say the least. As housing prices increase, rental prices tend to increase alongside them, making it even more difficult for aspiring homebuyers to save enough to enter the market.

With the housing market continuing to heat up, many young people are losing hope, seeing renting as their only option in real estate. 

We need new solutions to help Canadians start owning again. 

Over the past few years we’ve begun seeing alternative homeownership models pop up to increase the accessibility of homeownership and help people get into the real estate market.

With so many barriers to traditional homeownership we need alternative homeownership models more than ever. If you’re an aspiring homeowner, here’s what you should know about alternative models. 

They can increase accessibility

In Canada, it can take the average homebuyer up to 37 years in major cities to save enough for the recommended 20% down payment. Young people are being forced to spend the majority of their adult lives saving for a down payment, with many giving up on the dream of owning a home completely.

Alternative models are seeking to address this and help people start owning sooner, here are a few examples.

Housing co-operatives. Co-ops are an affordable housing solution that offers at-cost housing for their members. 

Rent-to-own agreements. With rent-to-own your monthly rental payments help you save for a down payment, with the intention to purchase your home at the end of your lease. 

Something to keep in mind with rent=to-own is that  there are often extra upfront fees which range from 1-5%. Additionally at the end of your lease you still have to qualify for a mortgage and put 5-20% down. If you decide to not take on the mortgage and purchase the home you risk losing all of the equity you’ve been saying up and your initial deposit, so it’s important to be sure you want to purchase your home before entering into an agreement. You can learn more here.

Co-ownership models. Co-ownership solutions are allowing Canadians to start owning years sooner by offering a lower entry point into the market. 

With Key’s co-ownership model you can start owning for an initial contribution starting at 2.5%, depending on the building (around 15k for many!). Two of the biggest differences between Key’s model and other alternative ownership models is that with Key you start building home equity from day one and you are never required to qualify for or take on a mortgage.

They can enable flexibility

A large barrier to entering the market with traditional homeownership is needing to qualify for a mortgage. 

For those who are self-employed, it can be especially difficult to qualify for a mortgage. And for those who want flexibility or are unsure of their timeline, taking on a conventional mortgage can restrict or prevent you from leading a flexible lifestyle.

While many alternative homeownership models still require some type of mortgage, there are other flexible ownership options out there. One of these is Key’s co-ownership solution.

Something that’s unique about co-ownership is that you are never required to take on a mortgage, you have the option to do so after the third year but it is never required. This is what allows for the incredible flexibility that Key offers. 

With more renters than ever trying to get into the housing market, it’s imperative that we look towards innovative models, so more Canadians can start owning again. If you’re an aspiring homeowner, consider learning more about alternative homeownership models in Canada and why Key’s model is one of the best solutions for first-time buyers