Higher rates, mortgage readjustments, and rising cost of living are pressuring even high income earners, but one company is offering a novel way to monetize equity
Shael Weinreb’s business begins with a family struggle. Weinreb’s father was in his 80s, living in Toronto in a home that had appreciated rapidly in value. He held a small mortgage on a property now worth well over a million dollars, but he was having an immediate cash flow problem. He was rejected for a home equity loan and, like any father might, he asked his son to find a solution. Weinreb, a lawyer by training specializing in real estate, started looking at the US market and found something called a Home Equity Sharing Agreement (HESA). He didn’t just use one to help his dad, he started a business to offer these products.
Weinreb is now CEO and Founder of The Home Equity Partners, a Canadian firm offering HESAs to Canadian homeowners. Rather than a loan backed by home equity, HESAs function as an investment by Weinreb’s firm into the equity of a property. Rather than demanding interest payments, The Home Equity Partners take a per centage of the value growth of the home over the term of the deal as well as the principal repayment. They take, Weinreb explained, a 4x multiple of the per centage of their initial investment from the growth of the property. For example, for a $100,000 investment in a $1,000,000 property with a ten year term, Weinreb’s firm would take 40 per cent of the value growth of the home above the initial value. It’s a model that Weinreb believes can suit a growing number of Canadians with valuable homes and an unbearable debt burden.
“The banks have prepared for probably the largest wave of mortgage renewals in recent memory between 2025 and 2026,” Weinreb says. “People locked into these historically low mortgage rates back in 2020. Fixed rate five-year mortgages at 1.8 or 1.9 per cent are now are being forced to renew at 3.8, 3.9 percent. All of a sudden their mortgage payments have doubled and a lot of people are living close to the edge.”
While stress tests and savings can help some borrowers weather these renewals, Weinreb notes that this rise in interest rates has come with a significant increase in the cost of living, as well as steady upticks in personal debt levels on credit cards, auto loans, and lines of credit. Equifax recently reported that non-mortgage delinquencies have hit their highest levels in Canada since 2009. This issue of debt burdens extend up the income spectrum, too. Weinreb notes that many high earning Canadians will experience lifestyle creep as a result of their earnings, sleepwalking into high debt levels that they can’t sustain long-term.
Ideally, advisors would have helped their clients prepare for these mortgage renewals and warned off issues like debt accumulation. Still, this can happen to countless Canadians. In those situations, Weinreb believes he’s offering a new option for cash-strapped clients that doesn’t result in further debt burdens or in erosion of their credit score. Weinreb notes that the upside for his firm and his investors lies in the appreciation of the home, if the market declines or stays flat they don’t see upside.
Because the Home Equity Partners participate in a 4x multiple return on any appreciation, Weinreb acknowledges that there could be some shift in a homeowner’s incentive to see their property appreciate. He notes, though, that even if the equity purchase is so large as to give his firm the majority of a property’s value growth, it’s still more in an individual’s interest to participate in 30 per cent of any upside rather than see their value decline.
Weinreb emphasized the valuation process that his firm employs, beginning with an independent appraisal to determine the value of the home at the time of investment. The value of the home is then added to a portal where it can be tracked to a number of indices that estimate what the home should be worth at each stage of the agreement. Weinreb notes that at any point in the term of the deal, the owner can exit and buy back their equity.
Weinreb sees utility in this kind of program for debt-burdened homeowners who need cash, as well as for older homeowners who want to extend the amount of time they’re living in their home but who need a lump sum. He acknowledges that the end term of the deal may result in a liquidity crunch for a homeowner, where they may need to sell the home in order to pay back the initial investment as well as the appreciation. However, he also argues that the time frame and cash should give those homeowners either the ability to rein in their debt levels, or invest well enough outside of real estate to end the term of the investment while retaining their home.
For advisors, whose goal is to help clients build wealth long-term, the idea of compromising home equity for immediate cash may seem anathema to that goal. Weinreb sees this issue but he argues that, in certain cases, the ability to use that cash to diversify investments and unlock different avenues for growth may prove more valuable in the long-term.
“Lots of people have a house that's worth a million and a half or two million dollars based on the general values of low-rise single-family homes in Toronto. But if you look at their RRSPs or you look at their TFSAs or you look at their non-registered accounts, you're probably sitting at 100 grand or 150 grand,” Weinreb says. “So they're really betting on the real estate market to outperform any other asset class. They’re disproportionately weighted to real estate, and probably don't have enough diversification to put into sort of the capital markets.”
