Co-Signing a Mortgage in Canada: How It Works and What You Need to Know
Co-signing a mortgage in Canada is one of the most common ways to help a family member or loved one qualify for a home – but it’s also one of
April 6, 2026No Comments
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To qualify for a mortgage in London, ON, lenders typically look at your credit score, income stability, and your Gross and Total Debt Service ratios (GDS/TDS). Unlike the U.S. system, Canadian lenders also require you to pass the federal “Stress Test,” which proves you can afford payments even if interest rates rise. We can help you review these numbers before you start house hunting in neighborhoods like Old South or Hyde Park.
In Canada, the minimum down payment depends on the purchase price. For homes under $500,000, you need 5% down. For homes between $500,000 and $999,999 (common for detached homes in London), you need 5% on the first $500k and 10% on the remainder. If you have less than 20% down, you will need mortgage default insurance (CMHC/Sagen). “Zero down” options are generally not available from major Canadian banks.
A fixed-rate mortgage locks in your interest rate and monthly payment for your entire term (usually 3 to 5 years), offering total stability. A variable-rate mortgage often starts with a lower rate, but your interest costs (and sometimes your payments) fluctuate based on the Bank of Canada’s Prime Rate. We can help you decide which strategy fits your risk tolerance and financial goals.
Your credit score determines whether you qualify with a “Prime” lender (like a major bank) or an “Alternative” lender. generally, a score of 680+ gets you the best rates in Canada. If your score is lower (600-680), you can still get approved, but you may be subject to stricter income rules. As a local London mortgage broker, we have access to lenders who specialize in helping clients with bruised credit.
You should budget between 1.5% and 4% of the purchase price for closing costs. In London, Ontario, the largest cost is usually the Provincial Land Transfer Tax (LTT). Other fees include lawyer fees, title insurance, and appraisal fees. The good news? If you are a first-time homebuyer, you may be eligible for an LTT rebate of up to $4,000 to help lower your upfront costs.
Not at all! We know that as a business owner, your goal is often to show less income on your taxes to save money. The good news is, we don’t just look at your tax return. We have access to lenders who look at your real business cash flow instead. This means we can often get you approved based on the money your business actually makes, not just what you declare personally.
It’s a bit different, but often easier in one key way: the building helps you qualify! When you buy a larger commercial or multi-unit property, lenders focus less on your personal income and more on the property’s income. As long as the rents cover the mortgage and expenses comfortably, we can usually find a lender who wants to fund the deal.
Yes, you definitely can, and many investors do this for tax reasons or liability protection. We can set up the mortgage so your company holds the title. Just keep in mind that lenders will usually still ask you to sign a “personal guarantee”—basically a promise that you’re backing the loan—but the asset sits safely inside your corporation.
Here is the simple rule of thumb:
Absolutely. Big banks often say “no” to properties that need a lot of work or short-term loans. That’s where we step in with Private Lending. These loans are designed for speed. We can get you the cash fast to buy the property and fund the renovations. Once the work is done and you sell (or refinance), you pay off the loan. It’s the perfect tool for house flippers.
As a licensed Mortgage Broker, I deal with major banks, Credit Unions, and dedicated Mortgage Finance Companies, plus countless alternative and private lending sources. This means that you only need one point of contact and one application to comparison shop more than 230 lending institutions for the perfect programs and rates!
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The rates quoted below represent a standard baseline interest rate for a prime rate mortgage. Please contact Mike to find out what you qualify for, and about exclusive and promotional rates.
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