Buying a home today isn’t easy. High prices, strict borrowing rules and the challenge of saving for a down payment have made it harder than ever for young Canadians to get into the market. For many, the difference comes down to whether their family can step in to help.

A recent survey from Mortgage Professionals Canada found that 70% of buyers who received financial help from family wouldn’t have been able to purchase a home otherwise. That figure speaks volumes about how important intergenerational support has become. But not every parent or grandparent has cash on hand to give. In many cases, most of their wealth is tied up in a home they’ve worked hard to pay off.

That’s where a reverse mortgage can offer a solution.

How it works

A reverse mortgage allows homeowners aged 55 and older to unlock a portion of the equity in their property without having to move or make monthly payments. The money can be taken as a lump sum or in instalments, and the loan, along with the interest, isn’t repaid until the home is sold.

For families, this has become a way to provide meaningful support to the next generation. The funds can be used toward a down payment, education expenses, or simply to give adult children and grandchildren a financial leg up. At the same time, homeowners remain in the property they’ve built their lives around.

Things to consider

Because no payments are made along the way, interest compounds over time. That means there may be less equity left in the home down the road, which can affect inheritance plans. It’s important to look closely at how a reverse mortgage fits into overall financial and estate planning before making a decision.

Even with those considerations, reverse mortgages have grown in popularity because they allow families to share the benefits of home equity today without the burden of additional monthly payments or waiting until a home is sold. In an environment where affordability challenges continue to mount, it’s a tool that’s worth exploring.
 
Every family’s situation is unique. I help people work through all kinds of financial circumstances. Let’s review your options so you can make the best decision for you and your loved ones. Contact me today and we’ll walk through the numbers together.

Paul Macara
Mortgage Professional
(250) 857-4741
paul@macaramortgages.com