Parental Co-signing Boosts First-Time Buyer Purchasing Power by 72%

First-time homebuyers in Canada are purchasing homes worth $787,000 on average when a parent co-signs their mortgage, compared to $458,000 without a co-signer. This 72 per cent increase in purchasing power allows adult children to take on larger mortgages than they could afford on their own. The Bank of Canada reports that the share of first-time buyer mortgages co-signed by parents rose from 4 per cent in 2004 to 11 per cent in 2025. The practice is most prevalent in expensive markets like Toronto and Vancouver, and among buyers who are younger, have lower credit scores, and lower incomes. In 74 per cent of cases, adult children would not have qualified for mortgages without parental assistance. This financial linkage leaves both the first-time buyer and the parents more vulnerable to a sharp deterioration in either party's financial situation.