Pitfalls for Parents Co-signing a Mortgage

2025-09-16 | 07:48:46

Every parent wants the best for their child, but co-signing a mortgage can be tough love for both parent and child. Experts warn the risks can be long-lasting, affecting debt capacity, retirement plans, and even family relationships. 

• Co-signing on a mortgage means that each co-signor is responsible for 100% of the financing amount, and it’s complicated and difficult to remove yourself from a mortgage.
• In addition, several major lenders will accept only one person signing a mortgage renewal. That could leave you as the co-signor on the mortgage longer than expected.
• Having more than one child can lead to family conflict, since there is a limit to how much debt parents can assume.

Other Ways to Help a Child Buy a New Home

Instead of co-signing, it may make more sense to offer a monetary gift or early inheritance. In that way, parents don’t have to be liable for anything. You can always protect the inheritance for your child by using a lawyer to register the monetary gift on title.

Would you like to talk about it? Contact me, Tracy Irwin, Mortgage Broker, today.

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