The short answer
What each one does
| Co-borrower | Guarantor | |
|---|---|---|
| Signs the loan | Yes | No, signs a guarantee (suretyship) |
| Property | Often an owner in whole or in part | No right to the property |
| Liability | Each borrower answers for the full debt (solidarity stated in the contract) | Answers for the debt if the borrower does not pay |
| Income | Counted, with their debts | May be considered to qualify |
| Credit score | At least one borrower or guarantor at 600 (CMHC) | Same |
Under Quebec law, a suretyship must be express (articles 2333 and following of the Civil Code of Québec) and the surety cannot be held to more than the principal debtor.
What the lender counts
The lender adds up incomes and debts. A co-borrower who brings high income but heavy debts does not always improve the ratio. Always ask for the calculation with and without them.
The risks to name before signing
- If the main borrower stops paying, the lender can turn to the other person for the whole amount.
- The loan affects each person’s borrowing capacity for their own projects.
- A separation or a death does not release the other signer; you need the lender’s consent and often a refinance.
How to get out
The lender must agree to remove a name, and the remaining borrower must qualify alone. Most often this means a refinance or a transfer to another lender. Plan it before signing: knowing how you get out makes getting in safer.
Frequently asked questions
Must a co-borrower be an owner?
Not always. The lender and the notary decide who appears on the title; a person who signs the loan without being on the title takes the risk without the rights.
Can a parent help without signing?
A down payment gift with a letter does not bind the donor like a guarantor. See the article on the down payment.
Does the guarantee show on the guarantor’s credit file?
Ask the lender before signing: practice varies.