This week, the Bank of Canada increased its policy rate from 2.25% to 2.5%.
It is the first rate hike since July 2023.
So, with rates moving again, what am I hearing from people?
One conversation that keeps coming up is parents wanting to help their adult children buy a home.
I speak to many parents who feel they would rather help their children now, when the money could make a real difference, instead of waiting until someday when that money may eventually be passed down as an inheritance.
And honestly, I can understand the thinking.
If you are in a position to help your child get into the market now, especially when there are so many buying opportunities, it can be a wonderful thing to do.
But there are also some very important questions to consider before writing the cheque.
Whose name should the property be in?
Should the parents be on title?
Is the money a gift or a loan?
What happens if the child gets married and later separates or divorces?
Is the parents’ contribution protected?
Those are not questions you want to figure out after the fact.
If you are thinking about helping an adult child buy a home, I would strongly suggest speaking with your accountant, estate lawyer, mortgage broker and real estate lawyer before making any decisions.
The good news is that we work with professionals who can help answer these questions and make sure everything is structured properly from the beginning.
And with buyers still having more choice and negotiating power than they did a few years ago, this may be a very interesting time for families who are in a position to help the next generation get started.
If this is something you have been thinking about, please reach out. We would be happy to help you start the conversation and connect you with the right experts.
And if you’re looking to buy or sell, please call Davelle.
My First Home: How to Buy Smart in Toronto
Know someone who talks about buying a home “someday”? Forward them a copy of our new My First Home magazine. It covers what to know, where to look, and how to buy smart in Toronto.
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As always, if you have questions about the market, or would like an updated home evaluation, we’re here to help.
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