Two incomes qualify for a lot more mortgage than one, which is why more first-time buyers in London and St. Thomas are buying with a sibling, a friend or a partner they aren't married to. It can work very well. It works best when the hard questions are answered in writing before closing, not after.
Buying With Someone?
I will help you work out what you can buy together and what to settle before you make an offer
548 490 4577 226 581 9220Joint tenancy vs. tenants in common
| Joint tenancy | Tenants in common | |
|---|---|---|
| Shares | Equal and undivided | Can be unequal, such as 60/40 |
| If one owner dies | The survivor automatically owns it all | That owner's share goes to their estate |
| Typical for | Spouses | Friends, siblings, unequal contributions |
| Transferring a share | Usually ends the joint tenancy | Possible, subject to your agreement |
Most married couples take title as joint tenants. Friends and siblings who contributed different amounts usually choose tenants in common, so each share matches what each person put in and passes to their own family.
Who is responsible for the mortgage?
Lenders qualify co-buyers on combined income, and each borrower is usually responsible for the whole mortgage, not just their share. If one person stops paying, the lender can look to the other for the full payment. That's the biggest reason to choose your co-owner carefully and keep an emergency fund.
What should the co-ownership agreement cover?
- Who contributed what to the down payment and closing costs, and how that is credited when you sell
- How the mortgage, property tax, insurance, utilities and repairs are split
- Who lives where, and the rules if one owner wants to rent out their space
- What happens if one owner wants to sell: a buyout formula, a right of first refusal and a deadline
- What happens if someone can't pay their share
- How disputes are handled, such as mediation before any court application
Without an agreement, a co-owner who wants out can usually apply to court under Ontario's Partition Act to force a sale. An agreement gives you a faster and cheaper way out.
How do first-time buyer programs work with co-buyers?
Each person's eligibility is separate. Every first-time buyer can use their own FHSA and RRSP Home Buyers' Plan. The Ontario land transfer tax refund is pro-rated by ownership share, so if one co-owner has owned a home before, the refund covers only the first-time buyers' share.
Should a parent go on title?
Parents sometimes go on title to help a child qualify. It can work, but the parent becomes liable for the mortgage, their share may not qualify as their principal residence, and they could owe capital gains tax on it when the home is sold. Get tax and legal advice before closing.
Frequently asked questions
Do we need a lawyer for a co-ownership agreement?
Yes, and ideally a separate lawyer for each co-owner, so each person gets independent advice. Your real estate lawyer can usually recommend someone.
Can we switch from joint tenancy to tenants in common later?
Yes, through a transfer registered on title, which your lawyer prepares. It can have tax and estate consequences, so get advice first.
How much can two incomes buy in London?
Lenders add your incomes together and run the stress test on the total, then subtract each person's own debts. Two $60,000 incomes with no other debts qualify roughly like one $120,000 income.
