As home values across Canada continue to outpace income growth, a growing number of families are turning to intergenerational strategies to overcome affordability barriers or jointly invest in real estate. This trend shows a shift in who’s involved in the purchase process in some cases. This affects how deals come together, what conversations are necessary early on, and how best to guide multi-party transactions that include not just the buyer, but parents or other family contributors.

Many homeowners who bought their properties for $500,000 or less a decade or two ago now find themselves sitting on homes worth $1.5 million or more, particularly in markets like Vancouver or Toronto and parts of Southern Ontario. That equity has the potential to be a lifeline for younger buyers who are priced out under today’s mortgage rules. As a result, a growing number of families are looking for ways to unlock that value to support the next generation.

1. Co-Signing to Strengthen Mortgage Applications

One of the most accessible forms of parental support is co-signing a mortgage. This helps when a younger buyer’s income doesn’t meet the lender’s stress test.

Co-signing allows parents or other relatives to apply their income and credit score to the buyer’s application, helping secure faster approvals and access to more favourable rates. It doesn’t require an immediate cash outlay, which can make it a lower-friction way for families to contribute.

2. Gifting Down Payments Is Now a Norm in High-Cost Markets

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.

Parents may want to be more involved in the property search in these situations, because of their financial commitment.

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. Co-Investing as an Emerging Wealth Strategy

Real estate agents may see more multi-generational clients for investment properties, too. 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. Rise of Multigenerational Living 

Properties suitable for multigenerational living may be more popular. 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.

If clients are considering these types of approaches or looking at properties with their children in mind, it’s worth encouraging them to speak with a mortgage specialist experienced in these situations early on in the process.