Emptying the Nest: How Parents are Helping their Kids Buy Homes

Sabeena Bubber • March 22, 2018

For parents who have the means to help their kids buy a home in today’s pricey environment, gifting money towards a down payment is one of the best way to do it.

In February 2018, the  Financial Post  ran  a story  about adults still living with their parents. The figures are staggering. The number of adults still living at Parents Inn—as the  Post affectionately referred to it—is up 13.3 per cent since 2001. For reference, young adults living with a spouse or partner is down 14.6 per cent.

For many boomers who, through modern healthcare and better habits, have been given a second chance at a teenager’s existence (albeit with more money and less mobility), their kids are definitely cramping their style.

“I’m 66 years old,” says Steven James (not his real name), a retired mechanic from Oakville. “I didn’t work my butt off for the last 48 years to share my bathroom with my son.”

Steven’s not alone. Boomers across the country are done with multi-generational living. And it’s gotten to the point where they’re throwing money at the problem. Of Canadian parents recently  polled by CIBC, 76 per cent would give their kids a financial boost to help them move out, get married or move in with a partner.

But these days, given the average price of a starter home and the  state of employment for young people  (the record low since 1976 was still over 10 per cent), it’s going to take more than just a “boost.”

If you’re in a position to help your kids buy a home (and help yourself reclaim your home), you have many options. But a gift—otherwise known as a living inheritance—is among the most sensible. Here are three reasons why:

1. Gifting money makes the most sense for tax reasons.

As a baby boomer, you’re in the middle of an unprecedented wealth transfer that CIBC capital markets  estimates  to be in the range of $750 billion in cash, property and investment holdings. If you’re in the position to not need the money coming to you, that windfall will just amount to a big tax hit. However, if you were to turn around and gift it to your kids, it’s no longer a tax burden for you or them (unlike in the U.S., Canada has no gift tax). This  Globe and Mail  article  delves into the long-term tax implications of gifting money: namely less for your kids to pay in estate tax when you die.

For all intents and purposes, gifting money is a way to take it off your books, without putting it on your kids’ books.

2. Gifting money makes the most sense for legacy reasons.

Shirtsleeves to shirtsleeves in three generations.

This old proverb neatly sums up what happens when large sums of money are passed down through a family. You’ve no doubt heard of wealthy heirs who finally get their hands on the family fortune, only to squander it away within a generation.

While you still have some control over where your money goes, gifting a portion of it towards the purchase of an appreciating asset for your children is sensible.

You won’t want to gift that money in the form of straight cash—it would be too easy for your kids to spend it haphazardly.

And you won’t want to gift a piece of property over to your kids. This is seen as a gift of assets “in-kind” and the Canada Revenue Agency will treat the transaction as if you sold the property at fair market value. You’ll be hit with a tax bill for 50 per cent of the capital gains, which could be substantial on an inherited property bought decades ago.

To gift the money for a real estate purchase, you’ll sign a letter confirming that the money is a gift and isn’t required to be paid back. On the morning of signing day, you’ll transfer the funds to your kid’s account (most primary lenders need to see money in the account before they complete the mortgage transaction).

3. Gifting money makes the most sense for legal reasons.

If you want to help your kids with their mortgage and you don’t have the liquidity to hand over a sizeable amount of cash, the other option is to co-sign or guarantee their mortgage. The problem with this approach is varying degrees of liability. By co-signing or guaranteeing the loan, you are assuming responsibility if things go wrong for your child if they can’t pay their mortgage. You can potentially be putting your financial future at stake.

In other words, you’d have to have the utmost  objective  confidence that there’s no risk of them defaulting on their mortgage.

Gifting a portion or all of the down payment, like gifting anything else, severs the tie you have with the money. None of it belongs to you, nor does the liability that comes with how it will be used.

But the best part of gifting your kids money to buy a home…

…will come when you are invited over for the first time and can see the fruits of all your labour: a better life for your children and their family.

 

This article was written by Dan Yurman and was originally published here on Canadian Mortgage Trends on March 13th 2018. 

SHARE THIS ARTICLE

RECENT POSTS

Tips to Pay Off Your Mortgage Early

By Sabeena Bubber • July 22, 2026
Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen: 1. Switch to Accelerated Payments One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget. 2. Increase Your Regular Payments Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance. 3. Make Lump-Sum Payments Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term. 4. Review Your Mortgage Annually It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you. The Bottom Line Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster. If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.

Bank of Canada Holds Rate at 2.25% — July 15, 2026

By Sabeena Bubber • July 15, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you. What the Bank of Canada Said Signs of Improvement For the first time in several months, the Bank is signalling that Canada's economy is showing real signs of improvement. Growth is picking up, and inflation is projected to ease gradually from its recent spike. While risks remain, particularly around the Middle East conflict and U.S. trade policy, the overall tone has shifted toward cautious optimism. The Global Picture Since the April Monetary Policy Report, global economic prospects have been dampened by higher oil prices from the Middle East conflict. However, the build-out of artificial intelligence is now supporting economic activity in a growing number of countries. Oil prices are still below their April peak, though the situation in the Middle East remains volatile. The U.S. economy is growing at about 2.5%, driven by strong consumer spending and booming AI investment. China continues to expand on the back of robust exports. Europe has been weighed down by high energy prices but is expected to strengthen in the second half of the year if prices ease as anticipated. The Bank projects global GDP growth will slow to 2.75% in 2026 before recovering to around 3.25% in 2027 and 2028. The Canadian Economy Canada's GDP data over the past year has been choppy. Growth stalled as the economy adjusted to new tariffs, high uncertainty, and slower population growth. But there are now clear signs that growth has resumed in the second quarter, estimated at 2.5%. The Bank acknowledges this largely reflects the unwinding of temporary factors, but sources of growth appear to be broadening. Consumer spending looks solid. Housing activity has been weak but is showing signs of stabilizing. Export growth has resumed and is expected to strengthen. Business investment is projected to pick up modestly, boosted in the near term by the oil and gas sector. More businesses also report they are finding ways to navigate through trade uncertainty. Following GDP growth of 0.7% in 2026, the Bank projects growth of 1.8% in both 2027 and 2028. The unemployment rate was 6.5% in June, continuing to hover in the 6.5% to 7% range it has maintained since late 2024. Inflation CPI inflation rose to 3.2% in May, mainly due to higher gasoline prices linked to the Middle East conflict. Excluding gasoline, inflation was just 2.2%, and core inflation measures remained close to 2%. That is an important distinction: the inflation we are seeing is largely an energy story, not a broad cost-of-living surge. Near-term inflation expectations remain sensitive to gasoline prices, but longer-term expectations are well anchored. The Bank expects CPI inflation to stay elevated in June before easing gradually in the coming months, returning to around 2% in early 2027. Inflation is then forecast to average around 2% in 2027 and 2028. Why the Bank Held Governing Council judged that the current rate of 2.25% remains appropriate to sustain the economic recovery and bring inflation back to target. Uncertainty is still high, and the Bank remains prepared to adjust monetary policy as needed. The commitment to price stability remains firm through this period of global upheaval. What This Means for Mortgage Holders and Buyers A rate hold means no immediate change to variable-rate mortgage payments or home equity lines of credit (HELOCs) tied to the prime rate. The prime rate remains at 4.45%. Today's announcement carries a more positive signal than we have seen in recent months. The economy is recovering, core inflation is near target, and the Bank's language suggests the path forward is one of gradual improvement, not further tightening. For borrowers, this is an encouraging environment to plan ahead. If you are renewing a mortgage in the coming months, thinking about purchasing, or weighing your fixed vs. variable options, now is a good time to have that conversation. The landscape is shifting, and being prepared puts you in the best possible position. The next scheduled rate announcement is September 9, 2026 . As always, every borrower's situation is unique. If you have questions about how today's decision affects your mortgage, reach out. I am here to help. Information sourced from the Bank of Canada's official press release dated July 15, 2026.
Person sitting by a large window, looking out at houses, trees, and snow-capped mountains.

Should You Keep the House After Divorce? What Your Lawyer Isn't Telling You

By Sabina Bubber • July 10, 2026
Before signing your separation agreement, read this. Mortgage broker Sabeena Bubber and Luisa Hough break down how to qualify, when to use alternative lenders, and how to protect your credit during divorce.