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Helping Your Kids Buy Their First Home

Although some things stay the same, the housing market isn’t one of them. If you’re in the thick of things with your adult children trying to buy a property – could you imagine paying the average 2025 Canadian home price of $678,331?! There’s truly a housing affordability crisis happening right now and it’s taking the biggest toll on new home buyers trying to enter the market – your kids. If you’re looking for options to help them with their home purchase, this article is for you.

The housing crisis your kids are facing isn’t just out-of-reach prices. There’s also stricter mortgage qualification guidelines (including the stress test), unemployment exceeding 7% in Canada in 2025, the growing gap between salaries and home prices, and a volatile condo market in Vancouver and Toronto – to name a few. So, here are a few ways to overcome the home-ownership barriers of 2025 and beyond.

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Financial Assistance

If you can afford to give your kids cash for a down payment, that’s great. There’s no minimum or maximum amount you can give them. You’ll need to make sure it has been in their account long enough or write them a gift letter or show proof of funds if not.
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Co-signing the Mortgage

If you’re still working or have sufficient income from other means, you can consider taking joint financial responsibility for a mortgage. The point is to improve their debt-to-income ratio so they can get approved for a mortgage that their own income doesn’t allow for.

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Early Inheritance

One trend that’s gaining momentum with the baby boomer generation is giving your children their inheritance early. It’s a plus for parents who get to see their kids enjoy it or help them when they need it more. You’ll have to do some financial forecasting for this to work.
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Reverse Mortgage

If the above aren’t great options for your family, and you own your own home, you could consider a reverse mortgage. This would give you a lump sum or monthly installments of cash which you don’t repay until you sell your home.

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Increase Credit Score

This is an indirect route, but a higher credit score has material benefits. It makes lenders more apt to provide financing, and can get the owner a lower mortgage rate. And of course, a lower rate means lower payments, and an easier time qualifying for a mortgage. Making sure they have bills in their name (like the electric bill) that are paid in full every month helps establish their credit worthiness.

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Pay off Debt

Even if you can’t cover the downpayment on a home, you can get your kids there faster by helping them pay down debt. This will not only free up room for saving, but it will also improve their debt servicing ratio and give them more room to borrow for a mortgage.
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Introduce Me! (Your Mortgage Broker)

Letting me take a closer look at their finances and mortgage needs might open a door or bring to light a lender you haven’t thought of. I’m happy to do a review at no charge.
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Putting a Home In Trust

Here you’d be the one purchasing the home and putting it in an irrevocable trust for your child. This is option makes sense if you want to maintain ownership, if your child has poor credit history and won’t qualify with a lender, or even if they are married and you want them alone to retain the home (in case of divorce). It’s also a strategic method of estate planning if you want your child to (eventually) receive the property and avoid probate and taxes.
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Joint Mortgage

Here you would each have separate financial responsibilities as part of the home purchase agreement, as outlined in the mortgage. This might be the right option if you want to co-own the home, and will each pay a portion of the mortgage every month. 

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Inter-Family Mortgage

If you have the cash to finance the house, you can loan them those funds and draft a personal mortgage or loan agreement. As it’s not governed by a financial institution, you have flexibility in what the terms of the loan are.

Regardless of how you choose to help, consulting a lawyer or mortgage broker is a good place to start. It can help you understand the legal implications of each option and be sure you’re making an informed decision. If you’d like to explore any of these further, with no cost or strings attached, reach out so we can set up a meeting.

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