"Owner financing" gets thrown around a lot, and not always accurately. Here's what it actually means under Canadian law, what should be protecting you as a buyer, and exactly how our Own Your Land™ program puts it into practice — 10% down, a fixed 10% annual rate, and a $0 prepayment penalty, always.
Strip away the terminology and it's a simple idea: the seller acts as the lender instead of a bank. No mortgage broker, no credit bureau, no approval committee — just a written agreement between you and the person selling the land. In Canada, that agreement is usually built one of two ways — and you'll often hear either one called by a few different names depending on where you're from.
Title transfers to you right away at closing, exactly like a bank deal. The seller then registers a mortgage (or "charge," depending on the province's land registry system) against that title as their security — the same tool a bank would use, just held by the seller instead.
You legally own the land from day one, subject to the seller's registered claim until the balance is paid off.
These are all names for the same underlying arrangement — "land contract" and "installment sale contract" are simply the terms used more often south of the border, while "Agreement for Sale" (or "contract for deed") is the phrase you'll typically see in a Canadian purchase agreement. Whichever label is on the cover page, the substance is identical: the seller keeps legal title until the full balance is paid, while you get possession, use, and an equitable interest in the property — which should still be registered against title (by caveat or similar instrument, depending on the province) to protect you.
Sellers sometimes prefer this structure, since holding title gives them extra security if a buyer defaults.
Canada's federal Interest Act (R.S.C. 1985, c. I-15) has applied to mortgage interest on real property since before most provinces existed in their current form. Section 6 is the one that matters here — and it's the actual reason our statements look the way they do.
Section 6 requires that interest on a mortgage secured against real property be expressed and calculated yearly or half-yearly, not in advance — not compounded monthly or blended in a way that obscures the real rate.
Our Own Your Land™ agreements charge a fixed 10% per annum on the unpaid balance, invoiced every six months — deliberately structured to sit inside the half-yearly rule, not around it.
Courts have held that a mortgage instrument failing to comply with Section 6 can forfeit its right to charge any interest at all — principal only. It's a real reason to read the fine print on any owner-financing deal, not just ours.
Everything above is how owner financing works in general. Here's specifically what happens when you buy through Firmground.
Look through current listings and reach our team with any questions — size, access, zoning, or anything else — before you commit to anything.
We send the purchase and financing agreement, spelling out the rate, term, and which legal structure applies to that property. Review it yourself, or have your own lawyer look it over first.
Just 10% of the purchase price secures the property — by wire, e-transfer, credit card, or certified cheque, in CAD, USD, or EUR.
Your interest is registered with the applicable provincial land registry, and any applicable deed transfer tax is handled as part of this step.
A fixed 10% per annum on the unpaid balance, invoiced every six months — set up this way deliberately to comply with the federal Interest Act's disclosure rules, not around them.
Pay down your balance faster, or pay it off entirely, any time you like. There's no prepayment penalty, ever — full ownership on your own timeline.
Plug in a purchase price and see roughly what your monthly payment would look like under our standard 10% down, 10% PA terms.
Estimates based on a fixed 10% PA rate on the unpaid balance. Actual payments may vary by property. Contact our team for a personalised quote.
Yes — it's a long-established, entirely legal way to buy and sell real property. It just needs to be documented properly and comply with rules like the federal Interest Act's disclosure requirements, the same way a bank mortgage does.
It depends on which structure applies to your specific property — a Vendor Take-Back mortgage transfers title to you immediately, while an Agreement for Sale (sometimes called a land contract or installment sale contract) transfers it once the balance is paid. Your agreement will specify which one applies, and we encourage you to have your own lawyer confirm it.
No — they're the same arrangement under different names. "Land contract," "contract for deed," and "installment sale contract" are terms used more often in the United States for exactly what a Canadian purchase agreement calls an Agreement for Sale: the seller keeps legal title until you've paid in full, while you get possession and an equitable interest in the meantime. Whichever term shows up, what actually matters is the substance of your specific written agreement — not the name on the cover page.
Reach out to our team as early as possible — the specific process and any grace period are set out in your agreement, and we'd always rather work through a temporary issue with you directly than let it become a bigger problem.
Yes, any time, in part or in full — there's a permanent $0 prepayment penalty on every Own Your Land™ agreement. Full ownership on your own timeline, always.
No. Rent-to-own is a lease with an option to buy later — you're renting until (and unless) you exercise that option. Owner financing is a purchase from day one; you're building equity and working toward full ownership under a financing agreement, not a lease.
Yes — like any landowner, you're responsible for ongoing municipal property tax on your parcel, regardless of which financing structure applies. This is a standard contractual term, not unique to owner financing.
More questions? The full FAQ library is on our Common Questions page, or ask our team directly.
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