Should you buy a second home for your child while they’re at university or college?
Spoiler alert: If you’re paying rent for four or five years, you might be throwing away tens of thousands of dollars. If your child is at college or university, or heading there soon, you’re probably starting to look into housing options, and quickly realizing that student rentals are not cheap. In cities like Toronto, Waterloo, Guelph, and Hamilton, rent can easily hit $1,500/month. Over four years, that adds up to over $70,000, and none of that money is coming back to you. That’s where another option comes in: investing in a second property for your child to live in while they study. Here’s why that might make more sense than you think.
You can buy a second home with just 5% down
It’s a common misconception that you have to be a first-time homebuyer to qualify for a down payment of less than 20%. Many people don’t realize this, but under Canadian mortgage rules, you can buy a second home with as little as 5% down if a family member will be living in it. (Note: here we’re talking about your child living in the property, but same goes if you invest in a second home for a parent or other relative to live in – even yourself!)
This isn’t an investment property in the traditional sense
It’s considered an owner-occupied second residence, which means:
- Lower down payment (as little as 5%)
- Access to the best mortgage rates
- Flexibility for your child’s student housing situation
Build equity instead of burning cash
Paying rent for four or five years is like pouring money down the drain. When you invest in a second property instead:
- You’re building equity in your name
- Your child has stable, secure student housing
- You could potentially rent a room to another student to help offset mortgage costs
- You can retain a long-term asset even after your child graduates
🎥 Watch: Why some parents are buying a second home instead of renting student housing
“Every month of rent feels like money down the drain. But with the right strategy, it doesn’t have to be.”
Is this strategy right for your family?
This won’t work for every parent, but for many, it’s a way to balance supporting your child and making a smart financial move at the same time.
As a mortgage broker, I help families across Canada run the numbers, secure the right financing, and make the most of their options, whether it’s buying a second home, investing in a rental property, or accessing equity in their own home.
Let’s chat about it
Want to see if this could work for you? Send me a message and we can book a quick call or zoom. I’ll walk you through:
- How much you’d need for a down payment
- What your monthly payments could look like
- What kind of properties to target near your child’s school
Contact me with the subject line “Student Housing” for a no obligation conversation. Let’s make a smart move before the housing rush!
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This is a clever equity-building approach!
With three decades in SEO and mortgage advisory, I’ve seen how flexible residential mortgage arrangements—especially those allowing additional units or rentals—can accelerate equity growth while supporting household income. This strategy is both practical and forward-thinking, especially for families looking to offset housing costs or invest in their future. Great actionable guidance for homeowners exploring creative mortgage solutions.
Really smart strategy—combining student housing with long-term wealth planning is a win-win. Over the years in mortgage and SEO consulting, I’ve seen how families can turn a typical residential mortgage into a powerful financial tool by renting to students. It’s a great way to offset costs while building equity in a high-demand market segment. This piece highlights a creative angle more homeowners should explore.