By Leanne Mollica, Mortgage Broker — My Mortgage Strategy (Salmon Arm, BC)
Co-signing for your child’s mortgage can feel like the ultimate act of love. You want to help them build stability, stop renting, and get a foothold in a tough housing market. But while your heart may say “help them,” your signature on a mortgage contract comes with major long-term financial implications that many parents don’t fully understand.
Before you put pen to paper, here’s what you really need to know.
What Co-Signing Actually Means
When you co-sign, you become fully responsible for the mortgage—not just partially. If your child misses payments or runs into financial trouble, lenders come to you for the full amount. It also shows up on your credit bureau as if it were your own debt.
And getting removed in the future? That requires your child to requalify on their own under current lending rules, income requirements, and interest rates—which isn’t always possible.
How It Can Affect Your Own Financial Future
A co-signed mortgage doesn’t just impact your child’s affordability. It impacts yours too.
- Reduced borrowing power for your own retirement plans
- Potential challenges if you want to downsize or refinance
- Long-term liability that remains even if family dynamics change
- Emotional strain between siblings if one child gets financial support and others don’t
Many parents underestimate how much this commitment can limit their own options.
Safer Alternatives to Consider
If you want to help without tying yourself to an ongoing liability, consider options that provide support without risking your full financial stability:
Gifting part of a down payment
A one-time gift is often safer and still gives your child a significant boost.
Using your HELOC
Some parents prefer to tap into their own equity and gift funds, rather than co-sign.
Offering an early inheritance
This can give your child purchasing power while keeping your own credit file clean.
Helping with rent, expenses, or budgeting
Support doesn’t always have to come from a contract.
The Bottom Line
Co-signing can work beautifully when it’s the right fit and everyone understands the risks. But it should never be done casually. I’m a mortgage strategist—not a lawyer—and this is one of the rare situations where legal advice is crucial. Ensure you understand:
- Your obligations
- The risk exposure
- Future exit strategies
- What happens if life circumstances change
A little planning now can protect both your finances and your family relationships.
Need support building your mortgage plan? I’m always here to help.
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📧 leanne@mymortgagestrategy.ca
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