What happens when a land lease ends?

Unless the lease is renewed or extended, rights to the land generally revert to the landowner. Terms vary, so it is essential to read the land lease and understand the end-of-term provisions.

Can I get a mortgage on a leasehold property?

Often yes, but lenders typically want the remaining lease to extend beyond the amortization, and some require larger down payments. A broker can match you to lenders comfortable with leasehold.

Why is leasehold cheaper than freehold?

Because you do not own the land and the lease eventually ends, leasehold usually carries a lower purchase price plus ongoing ground rent. The trade-off is less long-term certainty and potential resale limits.

Mortgage Glossary

What is Leasehold?

Leasehold is a form of ownership where you own the building or unit but lease the land beneath it for a fixed term. It is common for some condominiums, co-operatives, and homes on First Nations land. When the lease ends, rights to the land typically revert to the landowner unless the lease is renewed.

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Quick answer

Also known as: leasehold ownership, land lease

Key points

Leasehold means you own the building but lease the land for a set term.
Ground rent is usually payable to the landowner during the lease.
Common with some condos, co-ops, and First Nations land.
A shrinking lease term can complicate financing and resale.
Lenders often want the lease to outlast the mortgage amortization.

Leasehold explained

Under leasehold, your ownership of the structure is paired with a long-term lease of the land, often running for decades. You usually pay ground rent to the landowner and remain bound by the terms of the land lease for its duration. As the remaining lease term shrinks, the property can become harder to finance and resell.

In Canada, leasehold arrangements appear with certain condos, co-ops, properties on First Nations reserve land, and some recreational or waterfront lots. Leasehold contrasts with freehold, where you own both the building and the land permanently. Buyers should always check how many years remain on the lease and what the ground rent is before committing.

What a Leasehold is for

Leasehold exists to make ownership possible on land that the underlying owner does not wish to sell, such as institutional, municipal, or First Nations land. It can lower the entry price of a home and open up locations that would otherwise be unavailable, while letting the landowner retain the land long term.

How it can help you

Understanding leasehold helps you assess financing carefully, because many lenders want the lease term to extend well beyond the mortgage amortization. A short remaining lease can limit your options or require a larger down payment. Lenderoo shops 40+ lenders for free, so if you are buying leasehold, you can find lenders comfortable with the specific lease and structure.

When it comes up

Leasehold comes up when a buyer is drawn to an affordable condo only to learn it sits on leased land with 35 years remaining. They then weigh the lower price against the ground rent and the shrinking lease, and confirm a lender will finance it on acceptable terms.

Example: leasehold pricing and ground rent

A leasehold condo is listed at $480,000, about $90,000 less than a comparable freehold unit nearby. The land lease has 45 years remaining, and ground rent is $380 a month, or $4,560 a year.

Over 10 years that ground rent totals roughly $45,600 on top of your mortgage. The lower purchase price helps you qualify, but because the lease will have 35 years left when you might sell, a buyer then could face tighter financing, which can soften your resale price.

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Questions & answers

Leasehold: frequently asked questions

Common questions Canadians ask about leasehold.

Keep learning

Related mortgage terms

Freehold

Ownership of both a property and the land it sits on, indefinitely and without a time limit.

Read definition

Condo Fees (Maintenance Fees)

Monthly fees condo owners pay for shared expenses and reserves.

Read definition

Title

The legal record of who owns a property and any claims or charges registered against it.

Read definition

Down Payment

The upfront cash payment made when purchasing a home

Read definition

Lender

A financial institution or company that provides the money for a mortgage.

Read definition

Back to full glossary

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Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary

Mortgage Glossary

What is Leasehold?

Find my best mortgage Back to glossary

Quick answer

Also known as: leasehold ownership, land lease

Key points

Leasehold means you own the building but lease the land for a set term.
Ground rent is usually payable to the landowner during the lease.
Common with some condos, co-ops, and First Nations land.
A shrinking lease term can complicate financing and resale.
Lenders often want the lease to outlast the mortgage amortization.

Leasehold explained

What a Leasehold is for

How it can help you

When it comes up

Example: leasehold pricing and ground rent

A leasehold condo is listed at $480,000, about $90,000 less than a comparable freehold unit nearby. The land lease has 45 years remaining, and ground rent is $380 a month, or $4,560 a year.

Have a question about leasehold?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

Leasehold: frequently asked questions

Common questions Canadians ask about leasehold.

Keep learning

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary