Not sure why the bank is asking for for an Agreement of Purchase and Sale,usually it can be handled by an Assumption of Mortgage. I think Capital Gains only take effect upon sale of the property and is usually paid by the current owner. I will see if one of our RE lawyers have any more details.

Don't know abt Canada, but in the US (informal) mortgage assumption was done away with long back.

In all motgages there is a 'Due on sale' clause that states if a prop xfer ownership, the mort. co. has a right to call the loan.

Note: the wording says "right" to call the loan.

In the US what I would do is simply deed the property over. 99% (if not 100%) of the time the mort. co. will not call the loan as it is not in default. They have their hands full wil already defaulting loans.

Note: in the above scenario, the neighbor and not the parents will still be liable for the loan even though the parents are making the pmts.