How to Buy a Home in Retirement Without Selling Your Investments (or Help Your Family Do the Same)

KEY TAKEAWAYS:

• Many retirees have more options for funding home purchases than during their working years, which can be advantageous in a competitive housing market.
• Credit lines, like securities-backed lines of credit, enable retirees to make competitive cash offers, and mortgage recasts are a highly valuable tool that improves cash flow for retirees who plan to keep a mortgage.
• Gifting and family loans can be used to help children compete in a market where homeownership is increasingly out of reach.

We are in one of the most challenging housing markets in modern history. Rapidly rising prices, interest rates that have doubled, and frozen inventory are squeezing buyers, with borrowing costs surging while prices remain near historic highs. As retirement planning specialists, we spend a lot of time helping clients think through exactly this kind of challenge — and despite how tough this market is, many retirees have an underappreciated advantage: the financial assets to approach the market in a very different way.

In this Insight, we'll walk through a few ways to think about what role your home plays in your retirement plan — whether you're weighing a second home, sizing up how a move fits into your bigger picture, or just making sure your home decisions support the life you actually want to live, not just the goal of not running out of money.

Before You Take Out a Mortgage on Your Next Home 

When considering buying a new home, the most common problem is insufficient cash. You need somewhere to live, so selling your existing home (assuming you already have one) and using the proceeds to buy your new home isn’t really an option.

While obtaining a mortgage to buy your new home is the obvious choice, it isn’t cost-effective when you consider fees that equal 2%-5% of the loan value, especially if the plan is to pay off the loan quickly. 

And there’s another wrinkle with this plan: all-cash offers now account for about 40% of homes priced at $750,000 and above and continue to climb for higher-priced properties. So even if a mortgage solves your funding problem, it can put you at a real disadvantage due to higher costs, less competitive offers than cash buyers (and a reduced chance of negotiating a better deal), and a longer search as cash buyers keep winning the homes you want. 

Turn Your Investments into Buying Power

But what if we told you that many retirees are uniquely positioned to navigate this type of housing market? Unlike most working Americans, whose wealth is tied up mostly in future paychecks, a large portion of retirees’ wealth consists of relatively more liquid financial assets. This matters because it has never been easier to access liquidity from those assets without the usual tax implications of selling investments or withdrawing from retirement accounts.

So what's the tool that makes this possible? It's called a securities-based (or securities-backed) line of credit, or SBLOC. Think of it like a HELOC, but instead of borrowing against your home, you're borrowing against investments held in a taxable brokerage account. The appeal is that you can borrow against your investments without selling them, avoiding a large capital gains tax bill.

Let’s say, for example, that you want to make a cash offer on a $1,000,000 home and you have a taxable brokerage account with a $1,500,000 market value. 

You could either sell $1,000,000 of investments and likely pay a big tax bill on the resulting capital gains, or you could borrow from your account using an SBLOC, only paying interest on the loan balance. Once your existing home sells, you could use the proceeds to pay off the SBLOC loan. If your home sale proceeds aren’t enough to fully pay off the loan, a cash-out refinance can be done on your new home to pay off the SBLOC.

Lower Your Mortgage Payment Without Refinancing

Not everyone has a taxable brokerage account that can be used to borrow against and retirement accounts can’t be used as collateral for SBLOCs. In that case, obtaining a mortgage may be the only way and this is where the mortgage decision can interact with your overall retirement plan. 

Let’s continue with the example above of wanting to purchase a $1,000,000 home. If you’re able to sell your current and apply $750,000 towards a mortgage on this $1,000,000 home, you would typically make a large one-time principal payment or refinance to a $250,000 mortgage. Both of these options come with a catch.

Making a large principal payment shrinks your loan balance and shortens the payoff timeline, but your monthly payment stays exactly the same as if you still owed the full $1,000,000. For retirees drawing income from a portfolio rather than a paycheck, that unchanged monthly payment can strain your cash flow in retirement. 

Refinancing would lower your payment to match the new $250,000 balance, but it also means starting the loan process over which means more fees, paperwork, and underwriting. And for retirees, it also means the added scrutiny lenders often apply once you're no longer showing W-2 income. 

But there’s a much better third option that’s often overlooked: a mortgage recast. Here’s how it works. After making the $750,000 principal payment, you would ask your lender to recalculate (re-amortize) your monthly payments based on the new, $250,000 loan balance. This costs a fraction of what refinancing does, usually a few hundred dollars, but drops your monthly payment nearly as much as a full refinance would. For many retirees, that could be a meaningful, low-cost way to protect monthly cash flow without reopening the entire mortgage process.

3 Ways to Help Your Family Buy a Home

One thing we hear again and again from clients: they want their wealth to actually make a difference, not just grow. For many, that's really what legacy planning comes down to. And there may be no better place to put that instinct to work than helping the next generation buy a home. At a time when a lack of affordable housing pushes the homeownership milestone to increasingly older ages (and delaying other milestones, like starting a family), you would be hard-pressed to find a better way to help your children. 

While there are many ways to help fund a family member’s home purchase, we’ve narrowed it down to a few options that cover most situations:

1) Gift the Down Payment

The most straightforward option to help a family member buy a home is gifting. For most first-time home buyers, saving enough money for a down payment is the biggest hurdle, so a cash infusion can be a difference maker. Of course, the practicality of this approach depends on where you would need to source the funds. If you'd need to sell highly appreciated assets in a taxable account (triggering capital gains tax) or pull from a retirement account (triggering ordinary income tax), the tax bill alone might make this not worth it. 

A better path in this case could be to gift appreciated assets, like stocks, from your taxable brokerage account instead of cash. That way, the tax obligation is passed onto your child when they ultimately sell the investments (they’ll need to plan for the tax bill). This strategy may be particularly beneficial if you have high income that subjects you to the upper 18.8% or 23.8% capital gains tax rates, but your child is in the 0% or 15% capital gains tax brackets.

Keep in mind that the gift tax exclusion for 2026 is $19,000 per recipient. Married couples can combine their gifts for a total of $38,000 per recipient. So, a married couple can give up to $76,000 to another married couple without needing to file a gift tax return.

But given the $15,000,000-per-person lifetime exemption, exceeding that threshold does not necessarily mean that gift taxes are owed, simply that you will have to file a gift tax return. 

2) Buy the Home Yourself

In highly competitive housing markets, using a credit line, such as a securities-backed line of credit or a home equity line of credit, to make an all-cash offer may be a good option. Afterward, you can sell the home to your child, who can buy it by obtaining a mortgage. If you’re going this route, it’s best to coordinate with the lender to avoid any underwriting delays.

One thing worth planning around: if you sell the home to your child below market value, the difference between the sale price and fair market value can be treated as a gift. This might bring the same gift tax exclusion and lifetime exemption rules mentioned above, so it’s important to consider any potential tax and estate planning consequences of this move. 

3) Make a Family Loan

Using an intra-family loan to lend money helps make payments more affordable. To avoid the loan being seen as a gift in the IRS’ eyes, a formal promissory note must be drafted, payments tracked, and taxes paid on the interest you collect. The IRS sets the minimum interest rate that must be charged, called the Applicable Federal Rate (AFR), which is typically much lower than conventional mortgage rates (it’s currently ~5% when the 30-year fixed mortgage is ~7%). Based on today’s mortgage rates in 2026, the monthly principal and interest payment on a $500,000 family loan would be more than $600 lower than that of a conventional mortgage.

As is always the case with lending money to family, it’s good to assume that you won’t get all your money back. So it’s best to think about how that may affect the family in advance. You have the option of forgiving the loan, but any amount forgiven is treated as a gift by the IRS, which, depending on your goals, could be part of a long-term gifting strategy.

Your Housing Plan as Part of Your Retirement Plan

The housing market may be challenging, but retirees don’t have to approach it like everyone else. By looking beyond the traditional playbook, you will see a myriad of tools and strategies to turn your wealth into greater flexibility, which can mean helping you better compete in a tough market or make homeownership a reality for the next generation. If you're weighing a home purchase, a move, or how to help your family get there, and would like some guidance, you can schedule a complementary assessment with one of our retirement planning specialists here.

Frequently Asked Questions About Retirement Planning for Couples

Can I use my investments to buy a home without selling those investments?

Yes. A securities-based line of credit (SBLOC) lets you borrow against a taxable brokerage account without selling your holdings, so you avoid triggering a capital gains tax bill.

What's the difference between a mortgage recast and a refinance?

A mortgage recast keeps your existing loan and interest rate but recalculates your monthly payment after a lump-sum principal payment. A mortgage refinance replaces the loan entirely — new rate, new terms, and a full application process.

How much can I gift my child toward a home purchase in 2026 tax-free?

Up to $19,000 per recipient, or $38,000 per recipient for married couples combining gifts — without needing to file a gift tax return.

Is a family loan to help my child buy a home considered a gift by the IRS?

Not if it's structured properly with a formal promissory note, tracked payments, and interest charged at or above the IRS's Applicable Federal Rate (AFR).