Rising housing costs are leading to an increasing share of first‑time homebuyers seeking financial support from their parents. Specifically, Canada has experienced a noticeable rise in instances of parents co‑signing mortgages with their adult children. This practice allows buyers to purchase more expensive homes—but it can also make both parties vulnerable to financial disruptions.

Over the past two decades, house prices have risen faster than incomes. During this time, the rules to qualify for a mortgage have become stricter. Together, these circumstances have left some first‑time homebuyers unable to qualify for a mortgage and enter the housing market.

Because of this, many have turned to their parents for help.

To qualify for a mortgage, borrowers must meet two main criteria:

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  They need to make a minimum down payment.
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  They need to prove that their income can cover both their monthly debt payments and their housing‑related expenses.

Parents can help their adult children cover the down payment by gifting them money. They can also help their children meet the income criterion by co‑signing a mortgage. In doing so, they add their income to their children’s income and provide the lender with greater legal assurance about repayment. Co‑signing not only enables first‑time homebuyers to more easily qualify for a mortgage, but it also allows them to qualify for larger loans and purchase more expensive homes than they could on their own.

An analysis I did with some colleagues shows that in Canada, instances of parents co‑signing mortgages with their adult children have risen sharply since 2004. And buyers have been purchasing more expensive homes as a result. But co‑signing can also make household finances more vulnerable, which in turn poses risks to financial stability.

The share of mortgages being co‑signed by parents has risen

To conduct this analysis, my colleagues and I use anonymized credit data from TransUnion. These data do not include any information that identifies individual Canadians. We also leverage a dataset that links the TransUnion data with mortgage contract data—also anonymized—compiled by the Office of the Superintendent of Financial Institutions.

Our analysis focuses on mortgages granted to first‑time homebuyers who are under 50 years of age. For mortgages with multiple borrowers, loans are considered co‑signed by parents if the age gap between the oldest and youngest borrowers exceeds 18 years—a plausible assumption.

Using these parameters, we find that of all mortgages issued to first‑time homebuyers in Canada, the share of those that are co‑signed with a parent has risen from 4% in 2004 to about 11% in 2025 (Chart 1). 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. Co‑signing is also more common among first‑time buyers who are younger and who have lower credit scores and lower incomes.