Source: Storeys —
The “Bank of Mom and Dad” — older homeowners who dip into their own wealth to help their Millennial-aged kids rustle up a home downpayment — has long been a presence in Canada’s housing market.
In fact, according to the Toronto Regional Real Estate Board (TRREB) “gifts from family and friends” accounted for 17% of down payment sources for first-time homebuyers this time last year, and 11% of all buyers in the Greater Toronto Area.
Fast forward to today’s market, and while home prices have softened in recent months, rising interest rates continue to put the squeeze on first-timers. That’s made gifted funds as prevalent as ever — and Boomers are increasingly tapping into their existing equity in the form of reverse mortgages to make it happen.
“Even over the past year, we saw an increase of about 20% of the share of people saying they were using the funds for a related reason, which was potentially gifting or buying another property, et cetera,” says Vivianne Gauci, SVP Marketing, HomeEquity Bank. “That just gives you a sense of order of magnitude which mirrors some of the other data that you’re seeing in the market around this topic.”
