I wanted to take a page from the Dragon Age games, and have certain demons be able (through force, trickery, or a deal) to not just possess magi but fuse their powers to make a whole stronger than the sum of its parts. I'm not sure what the mechanics for this ought to be, though. I'm thinking maybe some boons like the demon being treated as if it didn't have a Might score whenever such would be beneficial, an increase in Parma, and the duo getting temporary Chthonic Magic (which, with a demon in charge, will probably be useful in every instance of magic).
Possessing demon has full range of magi arts and abilities, but uses demon's Penetration from might
Spells cast by possessed magus are boosted as if an entity was bound through Hermetic or Goetic binding
Just straight up add a couple levels of magnitude to every spell cast.
But as I asked before, it depends on how much extra "juice" you want this merging of magus and demon to have. The more you do, the more you get away from the "medieval-ness" of Ars Magica itself as they get to be more "evil faeries" than religious tempters of faith.
It should be preferable to a straight possession in some meaningful way, the magus's magic itself should be boosted in some way (even if it's a rather small boost), and the end result should be able to accomplish more than if the two were just working as a team (which might or might not be due to aforementioned magic boost). There's very little power boost requirement; I just want to make it more "demonic mage" than "normal mage possessed by demon."
Maybe one Infernal Blood, like Mythic Blood but with one demon, becoming all her magic False and changing his physical body to one mix between the Coagulated demonic body and the Energumen body.
I think you need to spell out what you mean by "demonic mage" and "possession," so I can tell how you want to diverge from the canonical game, which will I think explain what exactly you need in terms of house rules.
Canonical ArM demons, unlike a LOT of fantasy media (I haven't played Dragon Age, but I'm guessing from your description and Wikipedia it's included), exist as part of a cosmology where humans, and human action, are squarely at the center of demons' actions. Demons do what they do solely to change the way humans think and behave. It gives a demon no direct benefit to kill or possess a human unless it changes the way other humans think or behave.
Furthermore, demons in ArM have, other than specific vulnerabilities and supernatural restrictions, freedom of movement on Earth. Demons are not locked in Hell hoping that someone will find a book of forbidden lore and summon them. If they think their best bet to fulfill their demonic goals is to wander free on Earth, they will, and they do.
So, why are demons possessing wizards instead of doing all the other things they do with wizards in RoP:I? The answer to this question should tell you what powers the magi should get from consorting in the way you propose.
Also, metaphysically, in ArM creatures with Might are "crystallized" relative to people. They don't learn or grow or change without major supernatural effort. So, in the "rules as written," there's a sort of limitation on power when it comes to the power of creatures with Might. Either you directly channel/steal that Might for your own powers at a rate at or below 1:1, or you force the creature with Might to use its own powers independent of what you do.
Now, what you're proposing is something where the player gets power greater than a direct siphoning of the demon's might through magic. How, in your game, would this work? Why is it more powerful? That should point you towards a mechanic that works.
There isn't exactly a "Hell" in Dragon Age, but the goals of demons are the same, albeit to a different purpose. They want you to sin as well, because any mage overcome by the demon's particular sin while within it's territory is giving the demon an opportunity to bond with them for a ticket into the real world.
I recognize that Ars Magica has a very different cosmology. It was more the effect that interested me.
As for the demon's benefit, well, there are several potential purposes for this fusion. If it's willing on the part of the magus, bam, there's a soul probably far too arrogant to repent even if it does survive beyond the summoning. Plus, if the demon takes advantage of the relatively low-risk-to-self environment to direct the magus against their sodales, the increased power display might well catch the interest of said sodales even as they put the possessed magus down. And as they say, curiosity is the first step towards evil...
That's part of why I considered the Chthonic Magic or similar arrangement. Most of what demons can do for a magus can be done through other means that are, if not less soul-damning, at least less likely to get away with lying while screwing the magus over. On the other hand, there's a distinct lack of methods to acquire a boost to magical power itself, which would not only be highly valuable to the magus, but would probably help them convince themselves that they're the ones tricking the demon and that "it's okay if the stuff I use it for isn't too bad since it's still Magic," which helps the demon further prevent redemption attempts.
Plus, it's really hands-on. The demon has a magus doing the dirty work with their minds tempered by Virtue, but the demon will be right there to pull a string or two in all cases if they aren't a fan of the goings-on.