# Question: What are the key risks to consider with shared equity mortgages?

> Shared equity mortgages, while advantageous, introduce unique risks necessitating meticulous management.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/purchasing/question-what-are-the-key-risks-to-consider-with-shared-equity-mortgages

## Answer
Shared equity mortgages, while advantageous, introduce unique risks necessitating meticulous management. When a Federally Regulated Financial Institution (FRFI) participates, emphasis is placed on factors like Loan-to-Value (LTV) ratios, property valuation accuracy, and comprehensive borrower risk profiles.

## Institutional highlights
- Your lender will carefully assess how much you're borrowing compared to the property's value.
- Make sure your property appraisal is accurate and realistic, as lenders will scrutinize it.
- Be prepared to fully document where your down payment is coming from, especially if it's not from your usual bank account.
- Understand what happens if you can't make your mortgage payments and what options you and the lender have.

## Related guide
- https://ratellow.com/guides/shared-equity-fractional

## Sources
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- LTV Ratio Frameworks — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.4.3
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1