Young Canadians face brutal odds in the housing market , which surprises no one who has glanced at a listing lately.
Consider someone fresh out of university, college or trade school. According to Glassdoor, the average starting pay in Canada is about $56,000 .
In Canada’s gloriously pricey market, that income plus a $25,000 down payment — assuming they manage to assemble one — buys a mortgage of roughly $246,000, including default insurance, on a $261,000 home.
And that math pretends they owe nothing else — no car payments, no credit cards, no other loans.
Now, I don’t know where you live, but in most of Canada, that sum often lands you a charming mobile home or a studio/one-bedroom condo roughly the dimensions of a parking spot.
In fact, fewer than seven per cent of all regions where the Canadian Real Estate Association (CREA) tracks median home prices had homes averaging below $261,000. (CREA doesn’t track Quebec.)
In case you’re in a relocation mood, the regions that do are the Battlefords, Sask., Southeast Sask., Swift Current, Sask., Yorkton District, Sask., and Northern New Brunswick. And pack accordingly because in each, the nearest latte may be a country drive away.
Anyway, assuming ownership suits you (mathematically, it doesn’t for many), shoe-horning yourself into a home can be easier with a roommate.
With that same $25,000 down payment, two qualified borrowers earning $56,000 with no debts can buy a $500,000 home, meaning enough for a two-plus-bedroom starter place, even if you have to head out to the burbs to find it.
“We come across people all the time who will be approved for $250,000 or $300,000 and they can’t buy anything because prices are too high,” says mortgage broker Joe Bondy with Dominion Lending Centres.
He’s even hosted meetups for singles looking for a co-buying partner called the “Supermortgage Mingle,” and they’d draw “50 to 60 people,” he says.
The mathematics
Co-buying gets you onto the property ladder and building equity in a principal residence. Based on the 10-year average gain of 3.2 per cent annualized — per CREA average price data — that works out to about an $85,000 tax-free gain on a $500,000 principal residence after five years, before expenses like realtor fees, maintenance, and the rest.
These figures assume a 4.09 per cent mortgage rate, a 30-year amortization, a $500,000 purchase price and a $494,950 mortgage, default insurance included.
That hypothetical appreciation is on top of $23,400-ish each of accumulated equity from mortgage paydown if both buyers split the mortgage. This “forced savings” shouldn’t be underestimated. For some young folks who want to “live the life,” the only way to get them to save money is for a bank to take it from them first.
Each party’s mortgage payment would be about $1,189 a month plus property taxes (maybe another $150 a month depending on where you live), utilities and condo fees, if any.
That’s a manageable cost of living if you can find a suitable property and co-conspirator.
Moreover, reasonable assumptions support a solid financial upside in the large majority of housing cycles. Buying at the peaks in 1989 or 2022 are two clear exceptions, but the average home shopper today would already be buying 16 per cent off the 2022 peak.
When the co-owners part ways down the road, say in five years when their mortgage term is up, they can sell, or one party can refinance, and each walks off with equity to put toward their own place.
In many cases, one homeowner stays in the home and buys out the other at the fair appraised value.
Math aside, the two most crucial parts of co-buying are compatibility and legal protections, Bondy says.
Compatibility requires ample due diligence, so after a “speed dating” round in his mortgage “mingles,” Bondy would encourage potential co-buyers to really get to know each other and ask uncomfortable questions.
If match.com can pair people for life using criteria like age, interests, financial position, spirituality, goals, habits, etc., a similar checklist can apply to home hunters, he says.
The other critical part is the cohabitation contract, which requires careful planning together with (ideally) two lawyers.
Solid agreements are mandatory
“Plan for the divorce before it happens,” Bondy counsels people. “Everyone is happy going in, and then life happens. If you don’t have everything documented, the divorce is going to be messy.”
A cohabitation agreement must spell out things like:
- Legal structure (usually tenancy in common with no automatic survivorship, so if you brought 60 per cent of the down payment, you can split up the equity 60/40 and make payments accordingly.)
- Where the funds come from each month (typically it’s out of a joint bank account with each party auto-depositing the funds before payment day. Some banks, like National Bank, allow each party to pay from their own bank account if the mortgage is set up with two installments.)
- Whether a co-owner is allowed to have a live-in partner (and if so, the fact that the partner has zero property rights)
- Whether one partner can rent out their share of the property, have a pet, or host a revolving door of guests
- What happens when one party wants out (agreements lean on right of first refusal or shotgun clauses, which can force a sale if the remaining party can’t carry the mortgage solo).
- An optional reserve fund holding three to six months of payments, for the day one party suddenly forgets they signed an agreement. Again, hire a lawyer for proper protection here.
Some lenders even provide help with setting everything up, as is the case with Vancity Credit Union’s Mixer Mortgage . Google “Mixer Mortgage Agreement” and you’ll find a bunch of considerations for drafting your cohabitation agreement.
Potential deal-breakers
Both parties are fully on the hook for the mortgage, which is the great deterrent to co-buying, since nobody can ever truly gauge the odds that the other person stops paying.
And if one turns out to be a deadbeat who won’t cooperate with a sale, the other may be stuck asking a court to force it. That can drag on for months with no guarantee the party who kept their word recovers their due, particularly if prices are sliding and the sale doesn’t even cover the mortgage and closing costs.
All of this is why co-buyers had better be dead certain their housemate is respectful, has excellent credit, can hold down work that survives AI, tariffs and recessions alike, lives a compatible lifestyle, and is equipped with a personality they can stand.
Ultimately, co-buying won’t cure Canada’s affordability crisis, but for the right pair of compatible, creditworthy partners, it’s an inventive way into a market that has bolted the door on far too many solo buyers.
Just be sure to lawyer up and plan for the breakup before the honeymoon ends. You might find that the path onto the property ladder runs two-by-two.
Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
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