Definition
In a shared equity mortgage, a third party co-invests in the property without the borrower needing to repay them monthly. Instead of interest, the partner receives a share of future appreciation at sale or after a fixed term.
Example programs: - **First-Time Home Buyer Incentive (FTHBI, federal)**: federal program ended March 2024. CMHC co-invested 5-10% of the purchase price, recovering its share (with gain/loss) at sale or after 25 years. - **Provincial programs**: some provinces (BC, Ontario) have similar affordable housing programs. - **Family**: parents contribute 10% and recover their investment + 50% of appreciation. Structure formalized by notarial deed.
Advantage: reduces effective down payment and monthly payments. Disadvantage: the borrower gives up a portion of value creation. If the property appreciates 30%, the partner receives their proportional share.