How Parents Can Help Children Afford Homeownership
As a professional mortgage broker, I often speak with parents who want to help their children achieve the dream of homeownership but aren't sure where to begin. While the road to buying a home may seem challenging, there are several ways parents can provide assistance and guidance to make this goal more attainable for their kids.

Here are some key areas where parents can play an integral role:
- Learning How to Budget for Homeownership
Understanding the importance of budgeting is a crucial first step in the homebuying journey. Parents can help their children learn how to manage their finances effectively.
- Track income and expenses: Teach the importance of keeping track of both fixed and variable expenses.
- Saving consistently: Encourage children to set aside a portion of their income regularly to save for a down payment.
- Set realistic spending limits: Help them learn the balance between enjoying life now and planning for long-term financial stability, including homeownership.
- Building a Credit Report Early
A strong credit score is vital for securing a favorable mortgage rate.
- Parents can add their children to their credit cards as authorized users or co-sign for them on their own card, to start building a positive credit history.
- Teach responsible credit use: Show them how to make timely payments on credit cards and loans to maintain a healthy credit score. Using your cards with quick repayment and keeping the utilization low, all contribute to increasing a credit score.
- Regular monitoring: Encourage your child to regularly check their credit score to stay on top of any issues that might arise.
- Ways to Save for a Down Payment
The down payment is often the biggest obstacle for young buyers. Parents can help by offering both practical strategies and emotional support.
- Open a dedicated savings account: Set up a high-yield savings account specifically for the down payment, where the funds can grow over time.
- Gift or loan assistance: Consider offering a financial gift or loan to help boost the down payment fund.
- Match contributions: Help by matching the amount your child saves, motivating them to put more away.
Programs you should know about:
You may withdraw up to $60,000 from your registered retirement savings plan (RRSP) tax-free to buy your first home.
You may be eligible to save up to $40,000 tax-free to buy a home with an annual contribution limit of $8,000.
- Check with your mortgage professional to see if a RRSP loan may be right for you.
- Buying a Place with a Rental Offset
Parents can help their children buy a home that has the potential for rental income.
- Purchase a multi-unit property: Help them look for properties that have a legal suite, where they can live in one unit and rent out the other.
- Consider a single-family home with an additional space (e.g., basement suite) they can rent out, offsetting mortgage payments.
- Guidance on renting legally: Ensure that children understand local rental laws and tenant rights so they can effectively manage a rental unit.
- Sharing a Home with Your Kids (Legal Suite for Their Own Space)
Another option is for parents and children to cohabitate in a property.
- Investing in a multi-generational home: Parents can purchase a larger property with separate living spaces, such as a legal suite or basement apartment, giving both generations privacy while living together.
- If your child is open to living with you, cohabitating a home can be an excellent way to share homeownership and mortgage costs.
- The legal suite could be rented out to a tenant, if either the parent or child choose to move out the future.
- Cosigning for Their Mortgage
In some cases, parents may choose to cosign a mortgage to help their child qualify for a loan.
- If your child has a limited credit history or insufficient income, you can cosign their mortgage application. This shows the lender that there is a reliable second party responsible for the loan, increasing their chances of approval.
- It’s important to understand that as a cosigner, you are legally responsible for the loan if your child is unable to make payments. This could affect your own credit score and financial situation if the loan isn’t repaid as agreed.
- It is vital to establish clear communication with your child about their responsibilities in repaying the mortgage.
By implementing some of these strategies, parents can play a pivotal role in helping their children secure the financial foundation necessary for homeownership. The journey may require patience and planning, but with the right guidance, support, and resources, parents can make a significant difference in helping their kids reach their dream of owning a home.
Author: Jessy Bilodeau, Mortgage Connection