Across Canada, a growing number of families are confronting a difficult but increasingly urgent question. How can older generations help younger ones break into the housing market? As housing affordability declines, many parents are turning to their home equity to help the next generation.

For many parents, grandparents, and extended family members, the contrast is striking. A home purchased for $500,000 or less just one or two decades ago may now be worth $1.5 million, or even more in high-demand regions like Vancouver or Toronto and parts of Southern Ontario. They know they have been fortunate to ride a historic real estate wave, and equally recognize that their children are on the other side of that equation – priced out, frustrated, and living at home or renting far longer than expected.

Here are five of the most common approaches we see being used today by families seeking solutions for helping the younger generation.

1. Co-Signing to Strengthen Mortgage Applications

With the federal mortgage stress test still acting as a major hurdle for buyers, co-signing has emerged as one of the most accessible ways parents can help. In this scenario, a parent or other family member does not provide funds directly, but instead allows their income and credit profile to be included in the mortgage application.

This added strength can make the difference between an approval and a rejection, or between a higher-cost mortgage and a more favourable rate. It is a practical way to boost borrowing power without tapping into savings or retirement funds.

2. Gifting a Portion of the Down Payment

Financial gifts from parents, ranging from $50,000 to $300,000, are also becoming more common, particularly in markets where even entry-level homes are well above $700,000.

Consider this simplified scenario :

• Home price : $750,000
• Younger buyer’s savings : $50,000
• Parental gift : $200,000
• Total down payment : $250,000
• Mortgage required : $500,000

This results in a monthly payment of roughly $2,533, with a 30-year amortization at 4.5%.

If no gift were provided and the buyer could still only offer a $50,000 down payment, the mortgage would jump to $700,000, triggering mandatory CMHC mortgage insurance, adding on approximately $28,000 to the cost of housing and raising monthly payments to around $3,690.

That amounts to over $1,100 in monthly savings, plus the long-term benefit of avoiding mortgage insurance premiums. Taken together, that financial gap can be the deciding factor in whether homeownership is realistically attainable or out of reach.

3. Combining Financial Gifts with Co-Signing

In many cases, families combine the two approaches of co-signing and gifting to achieve both goals of increasing mortgage qualification and reducing the loan size. This dual strategy strengthens the purchase from both ends and makes a home more affordable over the long term.

This is not about spoiling adult children. It’s about creating stable financial foundations in an increasingly difficult market and ensuring their purchase is sustainable, not a financial stretch waiting to break.

4. Investing Together in a Property

With adult children often living at home until their early- to mid-30s, some families are using this extended runway as an opportunity to co-invest in real estate.

A common strategy involves purchasing an investment property, such as a duplex, and holding it long-term. For example, a family that purchases a $750,000 duplex could see it grow in value to approximately $1.34 million over ten years, assuming 6% average annual appreciation. Over the same period, mortgage principal payments would reduce the balance by around $88,000.

That translates into a potential equity gain of roughly $678,000 and a long-term wealth-building strategy that benefits both generations.

5. Upsizing Into Multigenerational Housing

Another option gaining popularity is the move toward multigenerational living arrangements, particularly in homes that feature a separate suite or basement apartment.

For families with sufficient equity, upsizing into a larger property creates space for adult children to live independently while staying close to home. This arrangement can eliminate rental costs and offer privacy, while also increasing the home’s utility as a long-term asset, especially if the suite is later rented or used to house aging family members.

Looking at Equity Through a New Lens
These strategies reflect a broader trend of Canadian families re-evaluating what home equity means and how it can be used not just for retirement, but for intergenerational support. These are not the only solutions, but they are some of the most common ones we help families with in our brokerage. In many cases, they offer meaningful assistance to the next generation, and in scenarios like joint property investment, they can even create long-term financial benefits for both parents and children.

How Canadian Families are Turning Real Estate Gains Into Generational Support? by Dion Beg | Canadian Real Estate Wealth