A new way to unlock the housing market

As seen in Toronto Life, published Feb. 20, 2022

For many Canadians, owning a home has become a fantasy. While nearly three quarters of millennials want to become homeowners, almost half say that goal is likely out of reach, according to a poll from tax and audit firm KPMG.

It’s not just concerns about mortgage payments or maintenance costs that stand in the way. Canadian home purchases require a lump-sum down payment—and simply meeting the minimum amount can be a huge barrier.

With home prices ballooning, it’s a challenge for an increasing number of prospective home buyers to even attempt to get a foot in the door. For example, the GTA’s median home price, which surpassed $1.4-million in 2021, requires $280,000 down.

Thankfully, new start-up Ourboro is helping to make the dream of home ownership a reality by offering an innovative way to buy a home without stowing all your savings into a down payment. First, Ourboro isn’t a lender. Instead, it’s a professional co-buyer that shares in the cost of the down payment. Ourboro acts as your partner in the home ownership process.

“We have such rigid expectations on what owning a home needs to look or feel like. But for many first-time homebuyers that don’t have access to generational wealth, it may not make sense to put all your savings into a home,” says Alex Kjorven, Ourboro’s Chief Product Officer. “We’re excited to challenge existing norms, and to make co-buying a no-brainer for folks who understand that it doesn’t have to be all or nothing.”

Down payments are calculated like so: for homes up to $500,000, the minimum down payment is five per cent. Between $500,000 and $999,999, you need five per cent down on the first $500,000 of the purchase price and 10 per cent on the remaining value. For homes priced at more than $1-million, the minimum down payment is 20 per cent of the purchase price. That demands a lot of saving.

But rather than scrimping every last cent to make a down payment, buyers can turn to Ourboro to cover a portion of it. That means you don’t need to amass the full amount required or divert funds from other sources, such as an RRSP. In contrast to a loan, Ourboro shares the title of your home in a professional co-ownership. Its contribution is an investment into your home’s resale value.

When the time comes to sell, your mortgage principal payments are returned to you, before splitting the remaining proceeds of the sale with Ourboro. If the resale value is higher than the original purchase price, Ourboro’s returns are based upon the appreciated value of its down payment contribution. But if the home is sold for the same amount as it was purchased, or loses value, Ourboro shares in the losses alongside you.

For buyers like Ricardo and Patricia, this model means no longer having to make the difficult choice between owning a home and other priorities.

“Ourboro’s program reduced our mortgage, which makes our monthly cash flow better,” says Ricardo. “We also didn’t need to use our retirement savings or the investments that we have for the kids’ education. They laid out a plan, and we knew exactly what was going to happen next. We felt like we were with friends and family looking after us and supporting us.”

Ourboro connects you with its lending partners to determine how much mortgage you can qualify for as well as partner real estate agents to help you find your new home. The support continues into ownership through trusted third-party services for maintenance, renovations and financing to help maintain and grow your home’s value.

“Buying your first home can be intimidating on a good day, let alone trying to navigate the current market conditions or explore financing options,” says Nick Pope, Ourboro’s co-founder. “It’s an emotional journey. Having a professional co-ownership partner can make a big difference; taking the anxiety out of the process by having a dedicated person guide them through.”