There has been a sharp rise in the number of parents co-signing their adult children’s mortgage applications, data from the Bank of Canada shows.
Of all mortgages issued in Canada to first-time homebuyers here, the share of those that were co-signed by parents rose from around four per cent in 2004 to around 11 per cent in 2025, analysis from the Bank of Canada said on Tuesday.
“The practice is especially prevalent in Canada’s largest and most expensive housing markets, such as Toronto and Vancouver, where affordability pressures are most intense,” the report said.
Co‑signing is also more common among first‑time buyers who are younger and who have lower credit scores and lower incomes, it added.
Get weekly money news
For some younger Canadians, it was the only way they could have afforded a mortgage in the first place.
The report found that in 74 per cent of the cases where the mortgages were co-signed, adult children would not have qualified for their mortgages without their parents signing on with them.
It also significantly boosted their purchasing power, the analysis found.
In 2022, the average adult who had their parent co-sign would have been able to afford a $458,000 home without co-signing. Having a parent co-sign meant they were able to afford, on average, a house worth $787,000, boosting their purchasing power by 72 per cent.
However, while co-signing can help younger Canadians afford a home, the report also warns that it can make them and their parents more financially vulnerable.
“Co‑signing enables many adult children to take on larger mortgages than they could afford on their own. Consequently, the financial positions of both the first‑time buyers and their parents matter,” the report said, adding that it can “leave both parties more vulnerable to a sharp deterioration in either party’s financial situation.”
The growing reliance on mortgage co‑signing “may represent an emerging vulnerability for the financial system.”
Co-signing does not make a $787,000 house more “affordable”, the price must meet the reasonable productive output of the AVERAGE person, which means a single income earner can reasonably handle the mortgage. The other productive adult(s) can put their available productivity to home upkeep. If prices are this elevated and a household must have 4 WORKING ADULTS to sustain a mortgage, you have a big problem.
This is not to say that it’s impossible, the key point I must stress is that FEWER people qualify and you must be ABOVE AVERAGE to make this work. If most people do not qualify you obviously have more people struggling and fewer households forming as a result.
The solution is not to BORROW more money to qualify for a larger mortgage, the parents are likely NOT in a position to help make those mortgage payments (they’re approaching retirement) if they think borrowing more money is going to make things affordable, they’re TERRIBLE at managing money and I am willing to bet that they got nothing saved for retirement. It’s more likely the monthly mortgage payments will be shouldered by the adults who originally couldn’t qualify without co-signing to begin with stretching them thin, and when that castle built on sand collapses, the banks will be going after mom and dad.
We really should not be normalizing “4 AVERAGE WORKING” adults to afford a home, this is ridiculous. What’s next? Bank of Grandpa and Grandma?
why are we shocked? this generation wants to own homes and have families and the government keeps doing everything in there power to make this unattainable for most Canadians. This country is actually pretty pathetic at the moment and the Liberal government should ashamed, this is all on them. But we know zero accountability or change will happen. I have enough to buy my first home.. will i though? not likely, this country is dead. We have the opportunity to change in this country but we do the same thing over and over and expect a different result. The way you get approved for a mortgage is also a joke in this country. Simple solution, make homes affordable and the avenue to home ownership more attainable for average Canadians.
bill Roach. Of coarse it always existed but it’s at a substantially higher levels for the past several years. It’s a joke.
That’s a foolish thing to do. Most new agers have no concept of paying off loans.
i wish i could but cant no money they will be here till we die
SO SO SO SAD, KIDS CAN’T GET ANYWHERE TODAY BECAUSE OF GOVERNMENT GREED. NEVER ENDS, NEVER ENOUGH. WHERE’S THE HOPE FOR YOUTH, MR CARNEY ? DO U CARE ? OF COURSE NOT
Canada is sh it.
Poor reporting again Global, parent co-signing has been happening for years, instead of trying to bolster the housing market why no highlight the riskd involved in co- signing mortgages ?
2026! Find Online Jobs (500$-6000$ Weekly) safe and secure! Easy Acces To Information. Simple in use. All the Answers. Multiple sources combined. Fast and trusted. Discover us now! Easy & Fast, 99% Match.
.
Here ………Www.PayAtHome1.Com