New report finds Bank of Mum & Dad is nation’s fifth biggest lender, ahead of ING DIRECT and Suncorp
29% of Australians aged under 34 are reliant on their parents to provide a deposit for a mortgage, a new survey has revealed.
A further 26% of first home buyers said they were waiting on inheritance to help them buy.
Incredible! The ‘Bank of Mum & Dad’ is second in size to Australia’s big 4 major banks. Parents have lent $65.3 billion to first home buyers, putting them ahead of ING DIRECT ($42bn) and Suncorp ($40bn).
The average family lent about $64,206 to their kids to get a foot on the property ladder.
The Bank of Mum & Dad, unlike its competitors, rarely requires the loan to be repaid – only a third of parents were to be looking to be at least partially repaid.
Doing the sums on deposits
According to the survey, the average Australian would have to save $1,116 every month for five years to afford a 20% deposit on an average FHB property.
It’s perhaps for this reason that contributing money towards the deposit is one of the main ways Australian parents help their kids. Allowing their children to live at home rent-free was the other popular approach, taken by some parents.
Acting as a guarantor was less popular although still quite effective.
Plan B
Luckily, there is some relief for FHBs especially in Queensland and on the Gold Coast where property prices are still very reasonable compared to Sydney & Melbourne.
With the help of the First home Owners Grant and a good mortgage broker FHBs can still get into thier own home with Little or No Deposit
Want to get into your First home but dont have a big 20% deposit?
Contact us and let’s put a plan together to see you into your home anyway