Are you the bank of Mom and Dad?

More than one-third of parents say their Millennial children are still financially dependent on them and, of the one-in-five Canadians still working past the age of 60, 12 per cent are helping out their kids, according to two surveys by the Financial Planning Standards Council.

And if your kids are looking to buy in hot housing markets such as Vancouver and Toronto, getting your help for a down payment may be an option on their path to homeownership.

Sheila Walkington, a Vancouver- based, fee-only Certified Financial Planner with Money Coaches Canada, says that she’s finding more parents are wanting to help their kids out with housing. “The housing crisis is such big news, especially here in Vancouver, and parents seem to feel that if their children don’t get into the real estate market soon, they may never own a home. Homeownership is still so tied up in our overall vision of success, so the prospect of their children never attaining this marker of adulthood is very concerning to many parents.”

Laurie Campbell, CEO of Credit Canada Debt Solutions, agrees. “As a parent, it’s easy to feel obligated to help your children, and some are even happy to do it – that never goes away no matter how old they get – but hurting ourselves financially doesn’t help our kids in the long run. They don’t want to be burdened with having to support us (financially) into our old age. Or, if you must sell your home to make good on outstanding debts, that won’t help them either, especially if they’re living at home.”

So, if you are going to help your adult child, keep these tips in mind:

  • Understand terms – is this a loan or gift?
  • If your child gets married and then divorced, how will that affect repayment or expectations?
  • Get everything in writing.
  • Don’t set your kids up for failure – you might be helping with a down payment, but can they afford the ongoing mortgage, property taxes, maintenance and more?
  • Speak with a lawyer who specializes in family law to find the best solution for your particular circumstance.


As much as many parents would like to help their kids get into a home faster, it’s important to ensure that your own retirement has room for the support. Remember the sage advice received at the start of every flight: Always don your own oxygen mask first, before helping others. Consider the advice of a Certified Financial Planner to help you create a plan.

RELATED READING

Planning for your first home as rates rise

Millennials hoping to buy a home but failing to plan

Expected expenses for first-time homebuyers

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