“Mom, Dad… we’ve found a house we love. We’re just a little short on the down payment.”

Sound familiar?

Helping your kids buy a home without risking your retirement. That’s the balancing act many parents are facing. The idea of helping your adult children buy their first home is something many would love to do. After all, you were there to celebrate your child’s very first steps!  Now, having the opportunity to help them take one of the biggest steps in their financial journey — becoming a homeowner — is a wonderful way to bring things full circle. And with the cost of homeownership in British Columbia, it’s no surprise that more families are turning to the Bank of Mom and Dad.

But while your heart may be saying, “Of course we will help!”, your retirement savings might have a slightly different opinion!  So, how can you help your children become homeowners without putting your own financial future at risk? It’s a conversation I am having more often with my clients. From purchasing a home together to co-signing a mortgage or accessing home equity, parents are exploring different ways to give their children a helping hand.

The good news? There are several options worth considering.

Gifting a Down Payment

Sometimes, the biggest hurdle isn’t affording the monthly mortgage payments. It’s saving enough for the down payment. A financial gift from parents can help bridge that gap. Many mortgage lenders accept gifted down payments from immediate family members, provided the funds meet their requirements and don’t need to be repaid. Before offering a gift, consider how it might affect your retirement plans and future financial needs.

Putting Your Home Equity to Work

If you’ve owned your home for many years, chances are you’ve built up some equity. A home equity line of credit (HELOC), refinancing, or potentially a reverse mortgage for eligible homeowners aged 55+ may provide access to funds that could help your children purchase a home. Each option works differently and comes with costs and responsibilities. Borrowing against your home can affect your cash flow, remaining equity and long-term financial security so just because you have access to equity doesn’t necessarily mean using it is the right choice.

Co-Signing a Mortgage

What if your child has saved a down payment but is having trouble qualifying for a mortgage? Co-signing or becoming a co-borrower may help strengthen their application. However, this isn’t simply just adding your signature to a piece of paper. You could become responsible for the mortgage if your child can’t make the payments, and that obligation may affect your own borrowing ability or the opportunity to help other family members.

Purchasing a Home Together

Some families are exploring the possibility of purchasing a property together. This could mean combining financial resources to help make homeownership more achievable. However, shared ownership also means shared responsibilities. It’s important to understand how mortgage payments, ownership arrangements and future decisions about the property will be handled. Legal advice can help ensure everyone is protected and expectations are clear.

Keeping It in the Family with a Loan

Rather than gifting money outright, some parents prefer to lend their children funds with the understanding that they’ll eventually be repaid. This can provide flexibility, but lenders may treat borrowed down payment funds differently from gifts. A properly documented agreement can help avoid misunderstandings and protect family relationships.

Before Opening the Bank of Mom and Dad… consider the following:

• Will this affect my retirement income or monthly cash flow?

• Could I manage the financial commitment if my child’s circumstances changed?

• Will I still have sufficient savings for unexpected expenses?

• How might this affect my other children or estate plans?

These aren’t reasons to avoid helping. They are simply important questions to ask and gage your comfort zone, prior to deciding.

Helping Them Build Their Future Without Compromising Yours

Every family’s financial situation is different, and there’s no one-size-fits-all solution. I often remind families, before gifting a down payment, co-signing a mortgage or using the equity in your home, it’s important to understand the long-term financial implications. The best solution is one that supports your children’s future while protecting your own retirement and financial security.

If you’re thinking about helping your adult children purchase a home, let’s talk. We can explore the mortgage options together and help you understand what makes sense for your family’s circumstances.