It’s no secret that today's young adults — those currently looking to lay down roots — face a greater challenge than their parents and grandparents did on the homeownership front.
In recent years, across Canada, home prices have climbed to unattainable heights — especially in the notoriously pricey Greater Toronto Area (GTA) and Greater Vancouver regions. In these locations, the most recent benchmark price of a home (including everything from studios to single-family homes) is a tough-to-swallow $1,061,900 and $1,171,500, respectively.
Compounding the situation, wages simply haven’t kept pace with the cost of living. Furthermore, high rent prices in places like Toronto and Vancouver render saving for a downpayment (and subsequent mortgage payments) a virtually impossible feat for today’s young urbanites.
Indeed, sadly, the “Great Canadian Dream” of homeownership simply isn’t what it used to be. According to a recent study from the Ontario Real Estate Association (OREA), some 25% of aspiring homeowners surveyed have given up believing in the possibility of buying a property (and another 24% are pessimistic about the odds). This is where the parents and grandparents are increasingly stepping into play. In fact, in this economy, it’s becoming commonplace.
Homes in a suburban neighbourhood in the GTA
The intergenerational transfer of wealth in the form of real estate investments is on the upswing in Canada. A 2024 CIBC report revealed that some 31% of first-time Canadian homeowners received financial help from their parents to purchase their property; a spec that’s up 11% from 2015.
It's evident that "the Bank of Mom and Dad" (and "of Grandma and Grandpa") is playing a major role in the next generation entering the housing market, all while establishing their own living legacy — and driving Canada’s homeownership — in the process.
How It's Happening
Nationwide, parents and grandparents are turning to multiple options to support the younger generation in property purchasing. A lump sum directed for a downpayment — perhaps from a fund that's been established over the years for this very purpose — is a common choice, for those who can afford it. Per CIBC’s report, as of June, the average downpayment gift came in at $115,000.
It's also becoming more common for parents to assume more of the financial risk of their adult child's home purchase.
But even so, helping children and grandchildren achieve the homeownership dream isn’t reserved for the privileged set. In fact, even if most of the older generation’s wealth is locked in their (likely appreciating) homes, they can still gift their relatives a foot in the door to homeownership. And they can do so without compromising quality of life in those hard-earned golden years, too.
Townhomes
Enter: HomeBridge. A new digital solution from HomeEquity Bank (provider of the CHIP Reverse Mortgage), HomeBridge makes it simple for home-owning Canadians to transfer their wealth and support their families. As a trusted resource in the gifting and wealth transfer space, HomeBridge enables Canadian homeowners 55+ to easily access their home's equity, so they can gift their adult children or grandchildren — and in turn, establish their living legacy.
“Homeownership has always been a key part of the Canadian dream, and is a significant milestone for young adults who want to put down roots or start a family. However, as property prices continue to escalate, it is becoming increasingly harder for young Canadians to afford a home,” said Steph Morgan, Managing Director of HomeBridge.
“HomeBridge puts parents in the driver’s seat of gifting to help their adult children achieve their dreams. By tapping into wealth through their home equity, parents and grandparents can help their family achieve homeownership without compromising their own financial security or lifestyle.”
Via HomeBridge, homeowners can access up to 55% of their current appraised home value. No monthly payments are required, so HomeBridge doesn’t impact cash flow or lifestyle, and the balance is only paid back when it comes time to move, sell the home, or when the last surviving mortgage holder passes away.1
To get more granular, HomeBridge offers a loan product that does accrue interest, but, given the long lead-time for paying back the balance, there's a healthy chance a homeowner's equity will be higher when the time comes to move or sell (and repay).
Homeowners also have the potential to benefit from appreciation during the loan's lifespan, depending on market conditions.
Importantly, HomeBridge doesn’t take any ownership in your house. This means that homeowners are able to stay in their current home — while continuing to save for future downsizing (or other golden-year fun) — and will never owe more than the sale price of their home.2 Furthermore, no working income is required to tap into HomeBridge's offering.
“HomeBridge offers a solution that simplifies intergenerational wealth transfer while empowering homeowners to create a living legacy,” Morgan adds. “By providing access to home equity and enabling meaningful financial contributions, HomeBridge lets parents and grandparents witness the real impact of their support as their children and grandchildren thrive. And that's a truly priceless gift."
To learn more about how HomeBridge works and whether you qualify, the company's FAQ page is a great place to start. From there, HomeBridge's team is poised and ready with any guidance you might be seeking.
When you're ready to make the move, solidifying your living legacy starts with a free online estimate — and then comes that joyous call to tell your kids (or grandkids) the news.
To learn more about HomeBridge, click here.
1, 2 Subject to the terms and conditions of the CHIP Reverse Mortgage.
This article is intended as general information only and is not to be relied upon as constituting legal, financial, or other professional advice. A professional advisor should be consulted regarding your specific situation. The information presented herein is believed to be reliable, factual and up to date but no representation or warranty, express or implied, is made as to its accuracy or completeness, and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change.
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This article was produced in partnership with STOREYS Custom Studio.
