Co-Equity

Own a home sooner with co-equity

Co-equity homeownership lets you partner with family, friends, or investors to buy sooner than you could on your own, with the terms written down from day one.

Talk to an agent about co-ownership →

How does co-equity homeownership work?

With co-equity, you buy a home with one or more partners, usually family, friends or an investor, and each party owns a share. Pooling down payments and incomes can get you into a home you couldn't qualify for alone. The trade-off is shared liability on the mortgage and shared decisions, so the agreement between owners matters as much as the mortgage itself.

Two or more parties own the home together and split costs and any change in value by agreement.
Most lenders require every owner on title to be on the mortgage, so each is liable for the full payment.
Combined incomes and debts are stress-tested together.
A lawyer-drafted co-ownership agreement should set out shares, costs and exit terms.

Owners on title

Min down on the first $500K

+2%

Stress test above contract rate

Co-ownership agreement

How co-equity works

Co-equity homeownership means two or more parties co-own a property, sharing both the costs and the appreciation. This can be structured in several ways depending on your relationship with your co-investor.

Family co-ownership

Parents help children buy by contributing to the down payment or co-signing. Ownership shares are formalized to protect everyone's interest.

Friend / partner co-buy

Two or more friends pool resources to buy a property they couldn't afford alone. Clear agreements define equity splits and exit terms.

Investor co-equity

An investor provides part of the down payment in exchange for a share of future appreciation. You live in the home and build equity over time.

Shared equity programs

Some municipal, provincial and non-profit programs offer down payment help in exchange for a share of the home's future value. Availability and terms vary by region.

Example: family co-ownership (illustrative)

Sarah wants to buy a $600,000 condo in Toronto. Her parents contribute $60,000 (10%) for a 10% ownership share and go on the mortgage with her:

Minimum down payment

$35,000

5% of $500K + 10% of $100K

Mortgage with 10% down

$556,740

$540,000 + 3.10% insurance premium

Ownership split

90 / 10

Gains or losses shared the same way

Because the parents are on the mortgage, their incomes help Sarah qualify, but their own debts and any mortgage on their home count too. Sarah still needs savings for closing costs and Toronto's municipal land transfer tax on top of the provincial tax; the land transfer tax calculator estimates both, including any first-time buyer rebate Sarah qualifies for.

Important considerations

• Legal agreements: Always get a co-ownership agreement drafted by a real estate lawyer.
• Exit strategy: Define what happens if one party wants to sell or can't make payments.
• Mortgage qualification: All co-owners are typically on the mortgage and responsible for payments. Use the mortgage affordability calculator to estimate combined buying power.
• Tax implications: Each co-owner reports their share of any rental income or capital gains.
• Insurance: All owners should be covered by the home insurance policy.

If one co-owner later wants out, the other can often buy out their share by refinancing the mortgage into their own name, provided they qualify alone. First-time buyers in the group may also be able to use the FHSA and Home Buyers' Plan; see our first-time home buyer guide.

Frequently asked questions

Questions co-buyers and their families ask us most often.

What is co-equity homeownership?

Co-equity homeownership means two or more people or parties share ownership of a home, and share its costs and any change in value according to an agreement. Common setups are parents helping an adult child, friends or siblings buying together, or an investor funding part of the down payment in exchange for a share of future value.

Do all co-owners have to be on the mortgage?

Usually, yes. Most lenders require everyone on title to be on the mortgage, which makes each of them responsible for the full payment if another owner can't pay. Some arrangements use a guarantor instead, who backs the loan without being an owner.

Is a parent's contribution a gift or an investment?

It depends on the paperwork. A gift is non-repayable and comes with a signed gift letter, which lenders accept for the down payment. If parents expect a share of the home's value back, that's co-ownership or a loan, and it needs to be disclosed to the lender and documented in a co-ownership agreement.

What should a co-ownership agreement cover?

Each person's ownership share and contribution, who pays which costs, what happens if someone misses a payment, how and when an owner can sell or be bought out, and what happens on separation, death or disability. Have a real estate lawyer draft it before closing.

Does the stress test apply to co-buyers?

Yes. Lenders qualify the combined incomes and debts of everyone on the mortgage at the greater of the contract rate plus 2% or 5.25%. A co-owner's existing mortgage or debts count against the application.

Planning to buy together?

We'll structure the financing and can point you to lawyers who handle co-ownership agreements. No obligation.

Talk to a mortgage agent