Should you help your kids buy a house? 

 

Should you help your kids buy a house?

(This will tick some people off for sure).

 

Lately, I've noticed a trend in our real estate business in both Alberta and BC. This was something I'd see here and there, but now it's something I'm seeing almost every week....

There are a ton of parents out shopping with their young adult children looking to help them get a foot on the property ladder.

 

What do you think? Is that a great move if parents can swing it, or is it a mistake?

 

This past week, I we had a family from out of town with their youngest who's starting a new job here next month. They were shopping for condos and this was going to be their "little guy's" first home.

 

After a busy weekend, we decided on a nice little 2-bedroom condo close to downtown and close to his work. We negotiated the price from $265,000 to $250,000 which was a fair deal for something like this. He's moving in next month and is thrilled about it.

 

And this is important, part of the reason we were able to negotiate like that is because the market has shifted., According to the latest data from the Calgary Real Estate Board (CREB) , inventory levels have improved compared to the peak seller-market years, giving buyers more negotiating room in certain segments, particularly condos.

 

Let's put the two options side by side.

Option 1. They help him rent a place.

Rent would be about $2,200 for this condo if they were to get something comparable.

 

Option 2. They help "their little guy" buy his first home. A 2 bedroom condo for $250,000 with 5% down.

Monthly payment comes to about $1,850 including mortgage payment, property taxes, insurance. Right here, he's already $350 ahead every month.

But... Let's look at the bigger picture over 5 years:
$21,000. Savings from the monthly payment
$30,747. Principle paydown
$39,818. Appreciation (assuming 3% annually)
$91,565. Better off than renting for 5 years!

 

If you really want to kick this into high gear, what if he invested the $350 into an investment that pays say 8% annually on average? Or took that money and paid it towards accelerating the mortgage paydown?

 

I'm sure there's going to be a few of you that say, what about CMHC fees, maintenance, increases in fees and taxes.... Yes, you are right.

 

But, on the flip side, I chose a mortgage rate a little higher than the going rate, I haven't done a rental increase on the other side or factored in that that rental unit might get sold and he might have to make a move in there. So, yes, not perfect, but the big picture math tells a story; and I like that story.

 

Here's how this breaks down for Mom and Dad.

Purchase price $250,000.
Down payment $12,500
Mortgage amount $237,500
Legal fees $1,250
Inspection $500
Condo doc review $500

 

Mom and Dad gifted "their little guy" $14,750 and "their little guy" 5 years later is up $91,565 over where he would be if he had rented for the same duration.

 

I like that math both as a parent or a young adult.

 

Let's also take a moment to consider.... If he did rent for 5 years and aim to save up, he would most certainly have a heck of a time doing that. I call this "the rental trap", where you have just enough money to make the rent, but not enough that you can save for a down payment.

 

My Opinion. Parents, If you can help, I think you should.

 

Not everybody is going to love that opinion... Some will say, NO! They should earn it, they should save, they shouldn't have everything handed to them.

I agree. The struggle and a bit of "real world" are good for kids to experience. It's part of developing.

 

HOWEVER, I consider this a hand-up, not a hand out. I'm not saying buy a condo cash and hand them the keys. Just a little help to get them started.

I've seen the results of this and it's been amazing. It can literally kickstart generational wealth.

 

PS. Keep in mind, there might be a day when the kids are paying for your next home! It would help if they have the money to do it!

 

What are your thoughts?

 

If helping your kids buy is something you're seriously considering, you may also want to read our latest blog about the Calgary Real Estate Forecast from the CREB Forecast Show. It provides additional insight into where prices, inventory, and buyer opportunities are trending as we move through 2026 context that can make a decision like this much clearer.