Definition
A guarantor (co-signer) is a person who contractually commits to repaying a mortgage if the primary borrower defaults. Unlike a co-borrower, the guarantor does not necessarily occupy the property and their name does not necessarily appear on the property title.
In practice in Canada, the distinction between guarantor and co-borrower is often blurred in mortgage contracts — both may be jointly liable. Most A lenders treat the guarantor like a co-borrower: their income is counted, their debts are included in ratios, and their credit file is checked.
Use of a guarantor is common when a young buyer has insufficient income or credit history. Parents co-sign for their child. Note: the guarantor's commitment can affect their own future borrowing capacity, as the co-signed loan appears in their credit file.