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FIRST-TIME BUYERS

Parents co-signing a mortgage in BC

Parents co-signing a mortgage is now a normal part of buying a first home. The Bank of Canada says it went from about 4% of first-time buyer mortgages in 2004 to about 11% in 2025. In BC, what decides whether it costs you the first-time buyer tax break isn’t the mortgage. It’s who goes on title.

Here’s what I’d want a buyer and their parents to know before anyone signs.

Why so many buyers bring a parent

Start with what a household income buys in Kelowna right now. These are my estimates, assuming no other debts, the minimum down payment, a 30-year amortization and a rate around 4.4%, before strata fees:

  • $100,000 household income: about $475,000. That’s the typical condo.
  • $150,000: the low $700s. That’s about the average townhome.
  • $200,000: about $1 million, just short of a typical single-family house.

So even a strong income leaves a gap. A lot of first-time buyers are closing it with family, not with a cheaper house.

The Bank of Canada put numbers on it. Looking at first-time buyers across Canada in late 2022, the average buyer could afford about $458,000 alone. With a parent co-signing, that went to about $787,000. In Kelowna, that’s the difference between a condo and a townhome.

If you want to see what that gap looks like in real listings, I keep two lists current: the best value homes in each income bracket and new townhomes under $800,000 in Kelowna and West Kelowna.

What co-signing costs the parent

This is the part that gets skipped at the kitchen table.

A co-signing parent is on the hook for the whole mortgage, not their share of it. If the payments stop, the lender can come to them. The Bank of Canada’s own write-up says co-signing parents are legally required to cover the payments if their child can’t, and that about a third of co-signing parents still have a mortgage of their own.

It also follows the parent. When they go to borrow again, for a renovation, a line of credit or their own next home, the lender counts that mortgage as their debt. Plenty of parents find that out at the bank years later.

None of that means don’t do it. It means the parent should get their own advice before they sign, from a lawyer and from a mortgage broker who’s looking at their numbers, not just the buyer’s.

Co-signer or guarantor

People use these words loosely, and lenders don’t all use them the same way. The difference that matters for tax is simple:

  • On title: the parent owns part of the home. Most people mean this when they say co-signer.
  • Not on title, on the mortgage only: the parent backs the loan but owns none of the home. Usually called a guarantor.

Which one the lender needs is the lender’s call. How it’s set up on title is your lawyer’s job. Ask both before you write an offer, not after.

The first-time buyer tax break and title

In BC, a first-time buyer can skip property transfer tax on the first $500,000 of the price, on a home worth up to $835,000. On anything from $500,000 to $835,000, that’s worth $8,000. The full rules are on my property transfer tax page.

The exemption only looks at title. If someone on title doesn’t qualify, you only get the exemption on the share owned by the people who do. The province’s own example is a 60/40 split where only the 60% owner qualifies, so only 60% of the home gets the exemption.

A parent who has owned a home doesn’t qualify. So:

  • Parent as guarantor, not on title: you keep the whole $8,000.
  • Parent on title 50/50: you get half. On a typical Kelowna townhome that’s $4,000 you pay that you otherwise wouldn’t.
  • Parent on title with a small share: you keep most of it. With 1% in the parent’s name, you’d keep 99%. Whether a lender will accept a small share is a lender question, and how to set it up is a lawyer question.

What a gift changes

A gift is different. If your parents give you the down payment and stay off title, your tax break doesn’t change at all, and they aren’t on the hook for the mortgage. The lender will want a signed gift letter saying the money never has to be paid back. CIBC’s numbers from 2024 put family gifts at about a third of first-time buyers, so it’s common.

The order I’d do it in

  1. Get pre-approved on your own first, so you know your real number.
  2. If there’s a gap, decide as a family whether it’s a gift or a co-signer.
  3. If it’s a co-signer, ask the lender whether they need the parent on title.
  4. Talk to your lawyer about how title is set up before you write an offer.
  5. Then shop. The first-time buyer’s guide covers the rest of the process.

If you’re working through this with your parents, text me at 250-801-8725. I’ll tell you what I’m seeing on real deals and help you find the right lawyer and broker for your situation.

Figures as of November 2026. Sources: Bank of Canada, “When parents co-sign a mortgage to help their adult children buy their first home,” April 2026. Government of BC, first time home buyers’ program, read November 9, 2026. CIBC World Markets, 2024. Income estimates are mine, not mortgage advice; confirm yours with a mortgage broker.

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