# How do lenders assess the creditworthiness of co-signers and guarantors?

> Lenders thoroughly evaluate the financial stability of co-signers and guarantors to mitigate mortgage default risks.

Category: Financing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/financing/how-do-lenders-assess-the-creditworthiness-of-co-signers-and-guarantors

## Answer
FRFIs prioritize verifiable income sources to prevent fraud and ensure long-term financial stability. For example:

## Institutional highlights
- Lenders will want solid proof of your co-signer or guarantor's income, like tax returns.
- Lenders look for steady income, considering what might happen if income stops.
- If your co-signer or guarantor is self-employed, they'll need to provide tax documents and business records.
- It can be tricky to use income earned outside of Canada, so lenders will be extra careful.
- Mortgage insurance can help lower the risk for the lender.

## Related guide
- https://ratellow.com/guides/cosigning-vs-guarantor

## Sources
- Guarantors and co-signors of mortgages — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.2
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- Canada Guaranty — https://www.canadaguaranty.ca/lenders/underwriting-guidelines/
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0