Rise of Parent Co-Signed Mortgages for Canadian First-Time Homebuyers
- Of all mortgages issued in Canada to first-time homebuyers, the share of those co-signed by parents rose from around four per cent in 2004 to approximately 11 per...
- The increase reflects growing financial pressures on young Canadians trying to enter the housing market, as rising home prices have outpaced income growth over the past two decades.
- Stricter mortgage qualification rules have further limited access for first-time buyers, prompting many to seek parental support through co-signing arrangements.
Of all mortgages issued in Canada to first-time homebuyers, the share of those co-signed by parents rose from around four per cent in 2004 to approximately 11 per cent in 2025, according to analysis from the Bank of Canada.
The increase reflects growing financial pressures on young Canadians trying to enter the housing market, as rising home prices have outpaced income growth over the past two decades.
Stricter mortgage qualification rules have further limited access for first-time buyers, prompting many to seek parental support through co-signing arrangements.
By co-signing a mortgage, parents add their income to their children’s application, helping them meet lenders’ income requirements and qualify for larger loans than they could obtain independently.
This practice is especially prevalent in Canada’s largest and most expensive housing markets, including Toronto and Vancouver, where affordability challenges are most acute.
Co-signing is also more common among first-time buyers who are younger, have lower credit scores, and earn lower incomes, according to the Bank of Canada’s analysis.
In 74 per cent of cases where mortgages were co-signed, adult children would not have qualified for their mortgages without their parents’ involvement, the report found.
While co-signing enables access to homeownership, it also exposes both parents and children to financial risk, as both parties become fully liable for mortgage payments.
Experts warn that the arrangement can create vulnerability if either party faces job loss, illness, or other financial disruptions that affect their ability to meet payment obligations.
The Bank of Canada notes that while some parents assist through direct down payment gifts, co-signing offers a way for those without significant savings to still support their children’s home purchase.
As housing affordability remains a persistent challenge, reliance on parental financial support continues to grow among first-time buyers across the country.