Helping your kids buy their first home: Smart strategies for today’s market

Parents can help their kids buy a first home without risking their own finances. Explore smart strategies, from FHSAs to co-signing and family loans.
With housing prices close to record highs, many young adults worry that homeownership is no longer a realistic goal. But with smart planning, education, and creative strategies, buying that first home is still possible. As parents (or grandparents), we can empower our kids by teaching them strong financial habits and helping them leverage programs designed specifically for first-time buyers.
Below are practical ways to support your children on their journey to homeownership—without jeopardizing your own financial security.
1. Teach them to build the foundation themselves
The best gift you can give your kids is financial knowledge. Supporting your kids to accomplish their goals builds their sense of independence and strengthens their confidence. Encourage them to:
Save early and consistently: Even modest savings add up, especially when started early. Help them set up:

• Automatic transfers into a high-interest savings account
• A budget that prioritizes saving for a down payment
• Clear milestones to track their progress

Maximize first-time homebuyer programs: Canada offers several generous incentives that many young adults overlook:

• First home savings accounts (FHSAs) allow contributions up to $8,000 per year (to a lifetime max of $40,000), with tax deductions on contributions and tax-free withdrawals for a first home purchase.
• The Home Buyers’ Plan (HBP) lets first-time buyers withdraw up to $60,000 from their RRSP tax-free, as long as it’s repaid over 15 years.
• First-time homebuyer incentives and land transfer tax rebates: Depending on the province, first-time buyers may qualify for additional support that reduces upfront costs.
• Teaching your kids how to combine these programs can be the difference between “someday” and “soon.”
  2. Consider family lending or co-signing
  If your child is close to qualifying but not quite there, family support can bridge the gap. There are a couple of options.
  Loaning funds to your child: A properly structured family loan can help with a down payment and may be initiated by using excess personal savings or by getting a loan yourself, then re-lending to your adult child. It can (and should) include a written agreement and repayment schedule. You may offer lower interest than a traditional lender, but it still helps create accountability while helping them succeed.
  Acting as a co-signer: If your child has strong cash flow but limited credit history, co-signing can help them qualify. Just remember that you’ll share responsibility for the mortgage. Any missed payments impact your credit score, and the mortgage could impact your ability to borrow
  This strategy works best when expectations and boundaries are clear. Document the terms of your agreement in writing and have it reviewed by a legal professional to protect all parties and prevent any future misunderstandings that could damage relationships.
  3. Explore early inheritance strategies
• Rather than leaving a lump sum later in life, some parents choose to give a portion of their estate early, when it can make a meaningful impact. Benefits include:
• Helping your child enter the housing market sooner
• Reducing your future taxable estate
• Allowing you to see the impact of your gift 
• Before giving large gifts, speak with a wealth advisor to ensure it aligns with your long-term financial plan. Also consider documenting the gift in a way that protects your kids in the event of a future relationship breakdown with their partner and/or to ensure an equitable estate distribution if multiple beneficiaries are involved.
  
  
  
  4. Partner with your kids on a property
  In some cases, buying together can be a win-win. Parent-child partnerships may include:
• Joint ownership with shared equity growth
• You owning a portion as a rental or investment
• An agreement outlining who contributes what, and how profits will be handled down the road
• This is especially useful in high-cost markets where neither party could buy alone. It may also assist with future planning for aging-in-place support.
  5. Encourage creative paths to ownership
  Homeownership today doesn’t have to follow the traditional route.
• Start small: A condo or townhome can be a great first step—affordable, manageable, and a way to build equity.
• Go bigger with rental income: A larger property with a basement suite, a laneway home or potential to build a garden suite, or multiple rentable rooms can help offset mortgage payments and fast-track financial independence.
• Get a roommate: Splitting housing costs allows young adults to qualify for larger mortgages, reduce monthly expenses, and build savings faster. This is one of the simplest and most effective strategies for first-time buyers.

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