Why Giving Money for a Down Payment Makes Sense
Helping a child or loved one buy their first home isn’t just generous — it’s smart. You may not realize it, but a down payment gift could generate an impressive 17%+ annual rate of return. That’s far better than most traditional investments.
1 in 3 First-Time Buyers Use Gift Funds
According to the National Association of Realtors, 32% of first-time homebuyers receive gift money to help with their down payment or closing costs. It’s more common than you might think, and it can make homeownership possible sooner than expected.
How a Down Payment Gift Builds Wealth
Let’s break it down:
- Imagine you gift $38,000 for a down payment on a $500,000 home.
- Homes appreciate about 3% per year, on average.
- After 10 years, that home could generate nearly $200,000 in equity — and that doesn’t even count the principal reduction from monthly mortgage payments.
Home Equity = Property Value – Mortgage Balance
In other words, your $38,000 gift could turn into nearly $200,000 in home equity. That’s like earning a 17%+ annual rate of return! Where else can your money grow that fast, while setting your loved one up for long-term success?
A Gift That Keeps Giving
Your financial gift does more than help with a down payment. It builds stability, pride, and generational wealth. It’s one of the smartest financial moves you can make for the people you care about most.
Number of the Week: 17%+
That’s the potential annual rate of return when you help someone purchase a home with gifted funds. Investing in their future starts today.