Why Rent-to-Own Often Fails Canadians | IGV Living

For many Canadians who want to own a home, rent-to-own is often presented as the only alternative when traditional homeownership feels out of reach. At first glance, it sounds promising: rent now, buy later. But for a growing number of households, rent-to-own ends up creating more pressure, more risk, and fewer real outcomes than expected.

Understanding why rent-to-own so often falls short is an important step toward finding a fairer path to homeownership.

What is rent-to-own?

Rent-to-own arrangements typically involve renting a home at above-market rates, with additional monthly payments and an upfront deposit. These extra payments are meant to count toward buying the home at a later date, usually at a price set in advance based on future value.

In theory, this helps renters “work their way” into ownership. In practice, the structure often shifts financial risk onto the renter.

The big question is: why doesn't rent-to-own work for people?

Higher monthly costs

Most rent-to-own agreements require rent that is significantly higher than market rates. For households already stretched by the cost of living, this added pressure can make it harder, not easier, to prepare for ownership.

Upfront deposits remain a barrier

Despite the promise of accessibility, many rent-to-own models still require deposits of 3–10%, often based on the future value of the home. For many Canadians, this remains an immediate and unrealistic hurdle.

Future pricing works against buyers

Because the purchase price is often set years in advance, renters may be locked into buying at a future price, even if market conditions or personal circumstances change. This removes flexibility and shifts the benefit of rising home values away from the future homeowner.

Risk sits with the renter

If a renter is unable to qualify for a mortgage at the end of the term, they may lose the additional payments they’ve made. This can leave people worse off than if they had simply rented at market rates.

Complexity and confusion

Rent-to-own contracts are often difficult to understand, with long terms, legal language, and financial mechanics that aren’t always clear. For many, this creates uncertainty and distrust rather than confidence.

A different approach to homeownership

The core issue isn’t effort or discipline. It’s structure.

Many Canadians are doing everything they were told to do: working, saving, and paying rent on time. The challenge is that the current system often asks them to take on more risk and more cost before they are ready.

That’s why alternative models are emerging that focus on reducing pressure rather than increasing it.

A fairer path to homeownership keeps rent at market rates, removes large upfront barriers, and allows time and stability to work in favour of future homeowners. Instead of forcing people into higher payments or rigid contracts, it captures real demand and connects it to partners who can deliver homes at scale.

Moving forward

Rent-to-own may work in limited cases, but for many Canadians it simply shifts the problem rather than solving it. Real progress comes from models that recognise housing as a long-term foundation for stability, not a short-term financial workaround.

For people who still want to own a home, the question isn’t whether hope exists. It’s whether the system is designed to support it.