{"id":22245,"date":"2025-01-14T07:00:00","date_gmt":"2025-01-14T12:00:00","guid":{"rendered":"https:\/\/www.zolo.ca\/blog\/?p=22245"},"modified":"2025-07-24T09:54:02","modified_gmt":"2025-07-24T13:54:02","slug":"buying-a-house-for-child-in-canada","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/buying-a-house-for-child-in-canada","title":{"rendered":"Is Buying a House For Your Child in Canada Possible?"},"content":{"rendered":"\n\n\n

Buying a home isn\u2019t always easy at the best of times. With high property prices, becoming a homeowner almost feels like a fantasy for most young people. So, as a parent, buying a house for your child in Canada may seem like the only option for them to get into the expensive real estate market these days. <\/p>\n\n\n\n

On the flip side, looking at the financial realities of helping your children buy real estate is essential. After all, it\u2019s your money on the line. So, considering your financial situation is step one. But first, consider whether buying a house for your child is a good idea and what scenarios could work for you.<\/p>\n\n\n\n

Why You Might Want to Consider Buying a House For Your Child in Canada<\/h2>\n\n\n\n
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Relying on family help to buy a home has become the norm in Canada. According to our 2024 Housing Market Report<\/a>, 48% of homebuyers used money from their or their partner’s parents or relatives, and another 20% used money from an inheritance.<\/p>\n\n\n\n

We discovered that 71% of Canadians worried they could never become homeowners<\/a>, while 67% felt they couldn\u2019t afford a home in their city based on the average price. Yet, Canadians want to be homeowners<\/a> so badly that 77% of the people polled admitted that they would put off saving for retirement if it meant they could be a homeowner sooner. We also found that 21.5% of Canadians want to get into the real estate market to start a family. <\/p>\n\n\n\n

When you look at these factors, along with the fact that it simply takes a long time to save up for a down payment since home prices are increasing, you may want to consider buying a house for your child or helping out in some way.<\/p>\n\n\n\n

Different Options For Helping Your Children Become Homeowners <\/h2>\n\n\n\n

There are many unique ways to help your child become a homeowner in a challenging real estate market. <\/p>\n\n\n\n

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1. Gift the Down Payment<\/h3>\n\n\n\n

Gifting money for the down payment \u2014 or, at the very least \u2014 helping them save for this significant chunk of the home price is one option. For many, saving a down payment alongside their other expenses and goals can be a barrier to entering the real estate market. You could cover the entire down payment or develop the missing percentage to help speed up the process.<\/p>\n\n\n\n

Related content<\/p>

Down Payment Assistance Programs in Canada<\/a><\/p><\/section>\n\n\n\n

To help your child save for a down payment, you could help them contribute to a First Home Savings Account (FHSA). This powerful account allows Canadians to save up to $40,000 tax-free towards the cost of their first home. However, only the account holder can deduct any contributions made to a FHSA.<\/p>\n\n\n\n

Not only would this relieve the stress of saving for your adult children, but it could also speed up the process and allow them to enter the market at a more optimal time. In addition, your child could also avoid paying the Canada Mortgage and Housing Corporation (CMHC) mortgage insurance<\/a> if you give them the funds needed for an adequate amount. That way, they don\u2019t fall under the threshold of 20%.<\/p>\n\n\n\n

2. Loan Your Child Money for Closing Costs<\/h3>\n\n\n\n

If you\u2019re not in the financial position to give a full down payment to your child, you could loan them the money to assist in additional closing costs<\/a>. This money could go towards closing costs or the funds accompanying the increased spending that comes with being a property owner, like moving.\u00a0<\/p>\n\n\n\n

There are many conflicting anecdotes about how to loan money to a family member for a house. It depends on your relationship with your children and what kind of loan agreement you create. A flexible loan could ease the burden on your children as they struggle to become homeowners.<\/p>\n\n\n\n

3. Cosign the Mortgage<\/h3>\n\n\n\n

Suppose you\u2019re not financially comfortable with loaning or giving a down payment. In that case, you can use your solid credit to assist your kid with getting approved for their mortgage, for example, by becoming a guarantor<\/a> or co-signer on their mortgage loan. <\/p>\n\n\n\n

There are differences between co-signing and being a guarantor. For instance, a guarantor is not listed on the property title, and they do not share property rights. If you choose to be a co-signer, you will be listed on the property title as part owner of the property and equally responsible for the repayment of the loan.<\/p>\n\n\n\n

Related content<\/p>

How Much Is a Down Payment on a House in Canada?<\/a><\/p><\/section>\n\n\n\n

While co-signing a mortgage comes with risks, it\u2019s an easy way to assist without spending any of your money. But, of course, your child must be able to afford the mortgage payments to avoid defaulting.<\/p>\n\n\n\n

What are the risks of co-signing a loan?<\/strong><\/p>\n\n\n\n