Many Canadian parents face a tough financial decision:
Should they help their child with university expenses or assist them in buying their first home?
Some families are fortunate enough to afford both — they’ve saved over the years for every stage of their child’s life. But for most, there’s only one savings pot, and deciding how to use it wisely becomes crucial especially as students complete high school and move toward university.
Understanding the University Costs
In Canada, tuition fees and living expenses can quickly add up. Student loan options are available, and repayment usually starts after a graduate reaches a certain income threshold. This means if a graduate earns less (like in public service or arts-related fields), they might not feel the full pressure of repayment.
Some parents feel responsible to prevent student debt by covering tuition and expenses. But it’s important to note that not all students will struggle with these loans, especially if they won’t be earning above the repayment threshold for several years.
Helping with a First Home Instead
Buying a home is a big financial challenge for many young adults. With high property prices, saving for a down payment is often more difficult than repaying a student loan. Many first-time buyers are only able to afford a home in their 30s due to years of saving.
If a student graduates and rents for a long time, the monthly cost of rent is often higher than a mortgage payment. For example, research shows homeowners typically have more leftover money each month than renters, even after paying their mortgage and student loan.
What’s the Right Choice?
If your child is aiming for a stable, high-paying career, it may be more practical to let them take out a student loan and instead help them buy a home earlier in life.
However, if they’re planning a lower-income path or may take breaks in employment, avoiding student loans might be more helpful in the long run.
In the end, the decision depends on your child’s goals and your family’s financial reality. Both paths are valuable it’s about choosing the one that creates the most long-term benefit.
