Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

Purchasing a house in Canada, whether you live in a big city or a smaller town has increasingly become more and more expensive. As homeownership is no longer a reality for many younger Canadians, it’s unsurprising the joint mortgage has gained popularity.

What Is A Joint Mortgage?

As you might guess, a joint mortgage is a mortgage that you take out with another person (or multiple individuals). In this scenario, you would apply for a home loan together and assume all responsibilities of the mortgage contract. The most common situation that involves a joint mortgage is when spouses or partners buy a house together. But friends or investment partners may also get into this type of agreement. In this case, both or all names of the parties involved are on title.

Joint mortgages are typically entered into in an effort to increase the odds of mortgage qualification. Considering how high home prices are these days, some people may not necessarily be able to get approved for a mortgage alone, and instead may need another person’s income to help secure the home loan. Not only that, but homebuyers also use joint mortgages to get lower interest rates and better terms on a home loan contract as a result of a higher combined income, or to take advantage of one borrower’s better credit score and financial health.

Certainly, joint mortgages can be very helpful for many borrowers. But there are also some potential drawbacks that all borrowers should know about before entering a joint mortgage with another person.

Find The Best Mortgage For Your Needs

Loans Canada logo
Loans Canada
VariesVariesAll of Canada - First mortgage
- Refinancing
- Renewal
- Lender switch
- Home equity loans
Alpine Credits
Alpine Credits
$10,000+Based on equityAll of Canada except Quebec- Home equity loans
Mortgage Maestro logo
Mortgage Maestro
$10,000+5.19%+All of Canada except Quebec - First mortgage
- Refinancing
- Renewal
- Line of credit (HELOC)
- Reverse mortgage
Neo logo
Neo Mortage™
Varies5.54%+All of Canada except Quebec- First mortgage
- Refinancing
- Renewal
nesto mortgages
$100,000+5.34%+All of Canada- First mortgage
- Refinancing
- Renewal
Homewise logo
VariesVariesBC, AB, MB ON - First mortgage
- Refinancing
- Renewal
- Lender switch
Fairstone Logo
$5,000 $50,000*19.99% to 24.49%All of Canada- Home equity loans
*On approved credit. Terms and conditions apply. Interest rates vary by province/territory and from customer to customer based on factors like credit score and borrowing history. See Fairstone's website for details.

Pros Of Joint Mortgages

Let’s take a look at some of the benefits of joint mortgages that may prompt you to consider one.

Increased odds of mortgage approval. As already mentioned, a combined income between two or three people can make it easier for mortgage approval. Of course, income is a key factor in a person’s ability to get approved for a mortgage, and if one person’s income isn’t adequate enough to afford a certain home, combining the income with another individual can help boost the odds of approval.

Higher loan amounts approved for. Not only can you increase your odds of mortgage approval, but you may also be able to afford a higher home price and therefore secure a higher loan amount to finance the purchase. Entering into a joint mortgage can increase your buying power and give you more freedom when it comes to the price range you can look at. 

Smaller down payment. A down payment is required to secure a mortgage, and the lowest down payment amount that is typically required is 5% of the purchase price of a home. But while you may be eligible for a down payment that small, you would be better off putting down a much higher percentage of the purchase price. This will help you minimize your loan-to-value ratio (LTV) and therefore reduce the amount you owe your lender. 

Not only that, but a larger down payment can also help you secure a lower interest rate thanks to the lower risk for the lender. Finally, putting down at least 20%, if possible, will allow you to avoid having to pay mortgage default insurance, which will require you to pay more for your mortgage overall.

Shared maintenance. Taking care of a home takes a lot of time, effort, and money. If you can share these responsibilities, then you won’t have to shoulder the burden entirely on your own. All the maintenance and repairs that are required can be shared, as can all the utility bills. This will give you some peace of mind knowing that you’re not on your own with these responsibilities. 

Cons Of Joint Mortgages

Along with the advantages of joint mortgages, there are also some drawbacks that you should consider.

A falling out may occur between joint partners. Whether you’re married to the person you’re in a joint mortgage with or are just friends looking to take advantage of the benefits that this type of arrangement can afford, it’s always possible for you both to cut ties with each other for whatever reason. It could be a divorce, a break-up, or just an end to a friendship. Whatever the reason may be for your falling out, such a situation could make it difficult, if not impossible, to remain in this situation. If the home needs to be sold as a result, you could find yourself dealing with a sticky situation.

One person wants out. If one partner in a joint mortgage no longer wants any part of the home while the other one still does, this could pose a problem. Either the interested party must come up with the difference in equity to maintain the home on their own, or the home must be sold in order to give the uninterested party their share of the equity. 

Learn more about the spousal buyout of a mortgage. 

One person loses their job. The original arrangement is dependent on both parties maintaining an adequate income to be able to afford the combined mortgage. But if one person loses their job, this could be a major issue when it comes to continuing to pay the mortgage on time. If the other person who is still employed cannot afford to cover the other person’s portion of the mortgage, the house may need to be sold in order to avoid mortgage default.

Is A Joint Mortgage The Right Option For You?

Joint MortgageNon-Joint Mortgage 
Mortgage paymentsA joint mortgage may provide more affordable payments as it is spread between you and your partner.With one income stream, payments can feel more expensive, because you can’t share the cost. 
Down-paymentWith two incomes, you can afford to put a larger down payment. With a single income, your down payment will be less than what you could provide with a partner. 
House responsibility Maintenance, upkeep, and general responsibilities that come with owning a house can be shared.All expenses involved in owning a house will fall on your shoulders.
Fewer FeesDue to your ability to provide a larger down payment, your mortgage default insurance premium will be smaller or nonexistent. With a smaller down payment, your mortgage default insurance premium will be bigger.
Better RateWith two incomes, you’ll look less risky and be more likely to receive a better rate. Considering all other things equal, a single income may lead to higher rates being charged. 

Joint Mortgage Alternatives

Wait And Save Up A Larger Down Payment

If you’re concerned that a joint mortgage might be the right option for you but you can’t afford to become a homeowner on your own, there a few additional options you may want to consider.

While this may delay your purchase of a house by several years, if you can’t afford a mortgage payment on your own, you should think about saving up a larger down payment. A large down payment will not only make your mortgage payments more affordable but a down payment of 20% or more will guarantee that you won’t have to pay default mortgage insurance. 

Look Into The First-Time Home Buyer Incentive

The Home Buyers’ Plan (HBP) allows Canadian consumers, who are purchasing or building their first home, to withdraw up to $35,000 from their RRSPs to put toward the cost of the home. Participants must be first-time home buyers and repay the money within 15 years.

Consider Getting A Cosigner

If you want to purchase a house on your own and be the only official owner, you can consider asking a family member or friend to cosign your mortgage. It will increase your borrowing power while still allowing you to be the only owner. Just keep in mind that a cosigner will be required to make a payment if you do not, this is why choosing someone close to you is important.

What About An Income Property?

While this is not allowed in all cities, purchasing a house with the option to rent out part of it to create an income can help certain borrowers afford more expensive homes. Some lenders will approved mortgage applications based on the borrower’s ability to earn an income with the property. 

Joint Mortgage FAQs

Can I add someone’s name to my mortgage?

If you currently own a house and you wish to add someone to the mortgage, you will do need to so when it comes time to renew your mortgage. Or you may choose to refinance your mortgage. Although refinancing your mortgage before the end of your term does come with fees, so typically this is not the best idea.

Who can I get a joint mortgage with? 

You can basically enter into a joint mortgage agreement with anyone, as long as they are able to qualify for a mortgage. 

Can I turn a joint mortgage into a single mortgage?

Yes, a joint mortgage can be changed into a single mortgage and transferred to one person. This might happen in the event of a divorce or the dissolution of a business partnership. The person left with the mortgage may need their finances checked again to make sure they are able to handle the mortgage payments on their own.

Final Thoughts

If you’re interested in applying for a joint mortgage or any other type of mortgage or loan product, Loans Canada can help. We’ll connect you with a mortgage lender who can offer you the type of loan product you need and can qualify for. 

Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

More From This Author

Special Offers

More From Our Experts
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood

A note to our clients about fraudulent lending practices and illegal upfront fees.
Statute of Limitations In Ontario For Debt

By Lisa Rennie

Everything you need and want to know about the statute of limitations in Ontario for debt.
Quebec’s Bill 31: Are Tenant Rights At Risk?

By Maidina Kadeer

Quebec's Bill 31 is an amendment to rental provisions. The bill includes the controversial cancellation of lease transfers.
How To Manage Debt: Credit Cards, Mortgages, And Beyond

By Lisa Rennie

From mortgage debt to consumer debt we have the top tips you need to learn how to manage debt responsibly and effectively.
Canadian Debt Collection Laws: How To Stop Collection Harassment

By Lisa Rennie

Are you currently being harassed by a debt collection company? Learn about the Canadian debt collection laws.
Can You Afford A Mortgage For A Million Dollar Home In Canada?

By Corrina Murdoch

Do you need a mortgage for million dollar home? Find out how much income you'll need, and what the monthly payments will be like.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card