For many Canadian homeowners, the empty nest has unexpectedly filled back up. Rising mortgage costs, inflated rental markets, and a still-tight housing supply have forced more adult children to move back in with their parents. While this trend isn’t new, what’s changed is the financial pressure accompanying it — not just for young adults, but for their parents as well.
Now, more homeowners are asking a practical question: Should grown children living at home contribute financially? In today’s economic climate, this isn’t just a household discussion — it’s a reflection of the broader challenges facing Canada’s housing economy.
Why So Many Adults Are Moving Back Home
According to Statistics Canada, the number of young adults living with their parents continues to climb. In 2021, over 35% of Canadians aged 20 to 34 were still living at home, a number that was just 29% two decades ago. While this trend may be influenced by cultural, educational, and lifestyle shifts, the biggest driver today is financial stress.
High home prices and record interest rate hikes by the Bank of Canada have significantly affected the ability of younger generations to purchase or even rent independently. The average home price in Canada remains over $700,000, with cities like Toronto and Vancouver pushing well past the million-dollar mark. Meanwhile, monthly rents for a one-bedroom in urban centres hover around $2,000.
From a mortgage professional’s perspective, this return to multigenerational living is not just a personal choice — it’s an adjustment to housing economics. When the average Canadian now needs over 20 years of savings to afford a down payment, staying at home becomes less about convenience, and more about survival.
Is Charging Rent to Your Adult Child Fair?
This brings us to the tough but necessary conversation: should parents charge rent when their adult children move back in? While every family situation is different, there are several reasons why asking for rent — even a modest amount — can be a smart move.
First, it helps teach financial responsibility. Many Canadian parents want their children to eventually own a home, build wealth, and manage money wisely. Charging rent, even if symbolic, can mirror the structure and discipline they’ll need once they move out. It introduces budgeting and sets expectations around household expenses — lessons that can’t be learned from free room and board.
Second, and perhaps more relevant today, is the strain housing costs are placing on parents. Many Canadians nearing retirement are still carrying heavy mortgage loads. In fact, as of Q1 2024, consumer debt related to mortgages has risen over 4% year-over-year, according to Equifax Canada. These aren’t just numbers — they’re realities impacting thousands of households.
If your income has stayed flat but interest rates have soared, you could be feeling the pinch. Charging rent can help offset increased expenses or even go toward paying down your mortgage faster. Some homeowners are even using it creatively, routing the rent into savings accounts or RESP contributions for future grandchildren.
It’s an especially prudent strategy for those exploring [best mortgage rates](https://unrate.ca/mortgages/), where even a small financial cushion can make a big difference when comparing fixed and variable products.
What This Means for Canada’s Housing Economy
The rise of adult children moving back home is more than a lifestyle dynamic — it’s part of a feedback loop affecting the broader housing market. With fewer young buyers entering the market, there’s a ripple effect on demand and price momentum. The Canadian Real Estate Association (CREA) has noted that home sales have slowed in several regions, especially entry-level housing categories.
What’s more concerning is the disconnect between wage growth and housing affordability. Even with dual incomes, many young adults can’t save enough for a down payment while paying rent. This stalls first-time buyer activity, leading many to postpone homeownership indefinitely or lean on shared ownership strategies like co-signing or family gifting.
In households where parents are still paying down a mortgage — or even leveraging their home equity through a [HELOC](https://unrate.ca/mortgages/heloc/) — having adult children contribute rent is less about profit and more about shared survival. Everyone in the household shoulders part of the economic load.
Some families also explore low-risk financial tools to manage this partnership, such as reverse mortgages. A [reverse mortgage](https://unrate.ca/mortgages/reverse-mortgages/) allows homeowners over 55 to access their home equity without selling, which can be helpful support if they’re housing children long-term.
How to Make it Work Without Straining Family Ties
Charging rent doesn’t have to feel transactional. Treating it as part of a larger financial education can ease the emotional side. Some families opt to use rental contributions as a savings mechanism — putting the money aside in a high-interest account to later help with a down payment. Others use it to teach about bills and budgeting by assigning household responsibilities.
Whatever your approach, transparency is key. Discuss expectations clearly. Is the rent symbolic? Is it covering utilities? Will they have privacy or shared household chores? These conversations can be uncomfortable, but they’re better had early than during times of tension.
For homeowners feeling stretched by the recent increase in borrowing costs, this is also a good time to review your [refinance](https://unrate.ca/mortgages/refinance/) options to see if you can free up some monthly cash flow. Even small adjustments in your mortgage structure can bring significant financial relief over time.
Final Thoughts: Home Ownership is a Team Effort
Adult children moving home isn’t just a by-product of housing unaffordability — it’s a new chapter in how many Canadian families are navigating financial uncertainty together. Asking them to contribute rent isn’t about punishment or profit. It’s about partnership in a shared economic reality.
As mortgage advisors, we’re seeing more clients rethink how they use — and share — their homes. Whether you’re carrying a large mortgage, refinancing an existing one, or supporting your children into their first homes, your strategy should evolve with the times.
If you’re feeling unsure about your current setup or exploring how to make home ownership work better for your whole family, the team at Unrate can guide you through today’s complex mortgage landscape.
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