In a shift from previous generations, more Canadians are heading into retirement with a mortgage — and it’s not because they’ve mismanaged their finances. In many cases, it’s a deliberate choice: to help their children enter the housing market.
According to a 2025 Royal LePage survey, 29% of Canadians planning to retire in the next two years expect to carry mortgage debt into retirement — more than double the rate in 2016. That’s a dramatic shift in less than a decade. Rising home values, tighter qualification rules, and a growing reliance on family support are all part of the equation.
For many families in Brampton, Toronto, and across the GTA, homeownership has become a team effort. As a trusted mortgage broker in Brampton, I see families getting creative every day to help the next generation become homeowners. Here are the five most common ways parents are making it happen — and why more are retiring with a mortgage as a result.
5 Ways Parents Are Helping Their Kids Buy a Home in Today’s Market
1. Gifting Down Payments
Many first-time buyers rely on family help to bridge the gap between their savings and today’s required down payments. A gifted down payment can lower the mortgage amount, eliminate default insurance premiums, and help buyers qualify more easily. For parents, it’s a meaningful way to help without taking on new debt.
2. Co-Signing a Mortgage
One of the most quietly impactful reasons parents are carrying mortgage debt into retirement is that they’ve co-signed for their children.
With high home prices and strict stress test rules, many buyers can’t qualify on their own. By co-signing, parents add income and credit strength to their child’s application. But even when the child covers 100% of the payments, the full loan appears on the parent’s credit report. It affects their debt-to-income ratio and can limit their ability to borrow or access equity for retirement.
In other words, it may not show up in their monthly budget, but it’s still on the books.
3. Helping with Monthly Payments
Some parents contribute toward monthly mortgage payments, property taxes, or utility bills behind the scenes. This support eases the burden for new homeowners, especially in a high-rate environment. It’s also a flexible alternative to co-signing or gifting a large lump sum.
4. Using a Reverse Mortgage
For parents who are equity-rich but cash-flow limited, a reverse mortgage allows them to access tax-free equity without selling their home. The funds can be gifted or loaned to their children, with repayment typically deferred until the home is sold. It’s a strategic option that preserves retirement lifestyle while still offering meaningful support.
5. Refinancing to Release Equity
Some parents refinance their existing mortgage to extract equity for their children’s home purchase. While this adds to their debt load, many view it as a worthwhile trade-off. In some cases, they extend the amortization to lower monthly payments and make the numbers work.
The New Shape of Retirement Planning
For many Canadian parents, retiring mortgage-free is no longer the primary goal. Helping their children achieve homeownership is. Whether through co-signing or drawing on equity, parents are using their financial stability to bridge the affordability gap.
In most cases, this support doesn’t strain their day-to-day budget. But it does appear on their credit report — and that can influence their future ability to borrow, or access retirement funds. Still, many see it as a worthwhile trade-off. Helping their children get a foothold in the housing market isn’t just a financial decision; it’s often a deeply personal one.
This trend has also caught the attention of financial professionals. A recent Globe and Mail article reports that retiring with mortgage debt is becoming more common across Canada, especially among those helping their children buy homes. Financial planners are increasingly collaborating with mortgage brokers to ensure support strategies align with long-term retirement goals.
Mortgage Debt as a New Form of Wealth Transfer
Research from TD Economics reveals another layer of this shift. Since 2022, the average mortgage balance for Canadians under 35 has dropped by $15,500. At the same time, balances for those 55 and older have increased by more than $22,000.
According to TD economist Maria Solovieva, this points to a new trend: intergenerational wealth is being transferred not just through gifts and inheritances, but also through debt. Parents are co-signing, refinancing, or using reverse mortgages to help their children buy homes. Even if they don’t feel the impact month to month, they’re carrying that debt — and it’s reshaping the way Canadians approach both retirement and homeownership.
A Brampton Mortgage Broker Who Understands Multi-Generational Needs
At Rakhi Madan Mortgages, I work with families every day who are navigating these complex decisions. Whether you’re:
- A parent exploring how to support their child’s home purchase responsibly
- A retiree considering a reverse mortgage or refinancing strategy
- Or a first-time buyer wondering how family help could strengthen their mortgage approval
I can help you structure a mortgage plan that supports both generations — without compromising long-term goals.
Homeownership is evolving, and in many families, multi-generational support is what makes it possible.
Let’s Talk About What’s Possible
If you’re a parent, retiree, or first-time buyer in Brampton, Toronto, or the GTA, I’m here to help you explore your options with clarity, care, and a long-term view.
Book a consultation today — and let’s create a mortgage plan that works for your whole family.
