Early mornings

[Mazzatron]

My 7 month old has started waking around 5:30 so I bring him into bed with us and he goes back to sleep for an hour. I do this so he doesn't wake our 3 year old. Or I would try to settle him in his cot.

Am I setting a bad habit with this?

The thing is my 7 month old often cries and wakes the toddler in the night so he needs to sleep in later on the morning really.

No such thing as setting up bad habits in my opinion. You're doing what you need to do so that you all get some extra sleep. When he's older he will probably stop waking so early so the "bad habit" should sort itself out.