Rent to Own in Markham: How It Works and the Risks to Weigh
Neeraj Moolchandani is a top real estate agent in Markham, Ontario. Published November 13, 2026 · By Neeraj Moolchandani, REALTOR®, Cofounder of the Kaizen Real Estate Team, eXp Realty, Brokerage
The short answer
In a rent to own deal, you rent a home for a set period, usually pay an upfront option fee, and often pay extra rent that may be credited toward a purchase at a price agreed today. If you cannot get a mortgage when the term ends, you usually lose the option fee and the credits. You also depend on the owner keeping the property in good standing. Have a real estate lawyer review any agreement before you sign, and compare it with safer paths such as an FHSA and a smaller first home.
With prices where they are, rent to own offers can sound like a shortcut to ownership. Some work; many leave families worse off. Our Kaizen Real Estate Team is one of the teams Markham first time buyers trust, and our job is to help you make a clear decision, not to sell you a home before you are ready.
Offered a rent to own deal? Talk to Neeraj before you sign anything.
Call (647) 370 8885How Rent to Own Usually Works
As BrokerLink describes, there are two main types:
| Feature | Lease option | Lease purchase |
|---|---|---|
| Do you have to buy? | No, you have the option | Yes, you commit to buy |
| Upfront fee | Usually a non refundable option fee | Often a deposit or fee |
| Rent | Often above market, with part credited toward the purchase | Same |
| Purchase price | Set at the start | Set at the start |
| If you do not buy | You usually lose the fee and credits | You may face penalties |
Source: BrokerLink, How does rent to own work in Ontario
The Biggest Risks
- You still need a mortgage: if your income, credit or savings are not enough when the term ends, you cannot buy, and the fee and credits are usually gone.
- The price is fixed: if values fall, you may be committed to paying more than the home is worth.
- The owner's mortgage: if the owner stops paying their own mortgage, the property can be at risk even if you paid every month.
- Repairs: some agreements shift maintenance to the occupant, unlike a normal rental.
- Above market rent: the extra you pay may be worth less than saving it yourself.
Want to see what you could buy now with a smaller down payment? Ask Neeraj.
Call (647) 370 8885Protect Yourself If You Proceed
- Have a real estate lawyer review the agreement before you pay anything.
- Ask your lawyer whether your interest can be registered on title to protect your option.
- Get a title search to confirm who owns the home and what is registered against it.
- Get a home inspection and an appraisal before you agree on a price.
- Get a mortgage pre approval now, so you know what must change to qualify later.
- Make sure every payment and credit is documented in writing.
Safer Paths to Ownership
For many Markham renters, a structured savings plan and a smaller first home lead to ownership with less risk:
- Open a First Home Savings Account and use the Home Buyers' Plan; our first time buyer guide explains both.
- Consider an insured mortgage with a smaller down payment; see our guide on buying with a lower down payment.
- Start with a condo or townhouse and move up later.
- Work with a mortgage broker on a 12 to 24 month credit and savings plan.
Planning to buy in two or three years? Neeraj can help you build a plan.
Call (647) 370 8885If You Are an Owner Considering Rent to Own
Owners face risks too: a tenant who stops paying, disputes over repairs, and uncertain tenancy rules. Get legal advice on how Ontario's tenancy law may apply before you sign. If you are new to renting out a home, our first time landlord guide covers the basics.
A Simple Test
Ask yourself: if this deal ended tomorrow and you could not buy, what would you lose? If the answer is a large option fee and years of rent credits, compare that loss with what the same money could do in an FHSA. Often the savings route is the safer one.
Have a question about getting into the market? Call Neeraj.
Call (647) 370 8885Questions Markham Clients Ask
How does rent to own work in Ontario?
You rent a home for a set term, usually pay an upfront option fee, and often pay extra rent credited toward buying the home at a price set at the start.
Is the rent to own option fee refundable?
Usually not. If you do not buy, you typically lose the option fee and any rent credits.
What happens if I cannot get a mortgage at the end of a rent to own term?
You usually cannot complete the purchase and may lose the fee and credits. Get a mortgage pre approval early to understand what must change.
What if the owner stops paying their mortgage?
The property can be at risk even if you paid every month. Have a lawyer review the agreement and the title before you sign.
What are safer alternatives to rent to own in Markham?
Saving in a First Home Savings Account, using the Home Buyers' Plan, buying a smaller first home, or using an insured mortgage with a smaller down payment.
Keep Reading
Helpful Pages
Find Your Path to Owning in Markham
Neeraj will help you understand your options and build a plan that protects you, whether you buy now or later.
Sources: BrokerLink, How does rent to own work in Ontario.
Neeraj Moolchandani, REALTOR®, Kaizen Real Estate Team, eXp Realty, Brokerage, 9763 Markham Rd, Markham, ON L6E 1A4. (647) 370 8885 · info@kaizenrealestate.ca. Published November 13, 2026. General information only, not legal, tax, financial or engineering advice. Rules and programs change, so confirm details with the official source and your own professionals before you act. Not intended to solicit properties currently under contract.
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