Homeownership: The Gift That Keeps Giving – How Parents Can Help Their Children

Whether you are a mom, have a mom or know a mom, May is the month to celebrate the amazing women whose hard work is often underrated. The most rewarding role I have ever had in my life is being a mom to my two amazing boys. The only thing that could top that would be the role of grandma and I look forward to that day. It doesn’t matter how old I get, I will always help my children in any way that I am able.  

One of the ways I am currently helping my sons is by contributing to their RRSPs regularly so they can use the funds to purchase a home.  First-time buyers can borrow $35,000 tax-free and pay it back over 15 years, either by direct contribution or by paying the tax portion each year on the amount not paid back.  In the case of a couple, they can each borrow $35,000 from their RRSPs for a total of $70,000.  That could mean the difference between buying an apartment and a single family home.

Because interest rates are at an all time low and many older parents have a large amount of equity in their homes, parents could either refinance their mortgage or take a second mortgage to help with a downpayment for their kids. 

Another way parents and grandparents can help their children is by gifting part of their inheritance early.  When middle aged parents receive an inheritance from an elderly parent, a great way to help their children would be to gift money from the grandparents’ estate to help them get into the housing market now.  Even during a global pandemic, prices in the London and surrounding area are projected to continue to rise for the next two years.  That means there is no better day than today to get into the housing market.  Not to mention that owning is still less expensive than renting. 

This past year has brought about so many changes.  Perhaps instead of paying for a large, expensive wedding that lasts only one day, parents and grandparents could help their (grand)children with homeownership – a gift of future financial security.

Debbie Braun, Realtor at Keller Williams