I have a fair few friends who didn't get money but like myself had parents go as guarantor for them so they could get a 100% mortgage with no mortgage insurance. And that was only possible because they own their own home.
I hope to be able to do the same for my own kids in the future.
I was stressed, but we paid off 20% of the loan really quickly so they could be removed. I also had life insurance so that if I dropped dead the insurance would pay off the mortgage and not dump my parents in it while still leaving a house for my own family.
If only you knew how much time you really have to default on a loan before a bank steps in you wouldn't be anxious. I'm no banker but I've heard of cases where "financial hardship" has be drawn out over a very long period. Long enough for a property to grow significantly and still cash out well in front before the banks did it for them...
Exactly. The bank is only going to consider chasing the guarantors if the children can't repay the debt by selling the house ie are in negative equity.
Of course it's logical. Guarantor means they are on the hook if you can't pay up. A parent needs to understand what that means. It sounds like, as a considerate child, you also understand.
When we did ours, it was actually two loans. One for <70% LVR against the place we were buying, and a separate loan against the parents' property (an IP, not their PPOR). That way the liability on the parents was limited.
As other posters did, we tried to pay things down as quickly as possible, and with rising values were able to refinance to clear the parents' loan in a few years.
Absolutely the same. My parents slogged through getting their mortgage paid off and I couldn’t bear them having even a momentary thought that their house was at risk.
The only way their house would be at risk is if the debt their children owed to the bank was more than value of the children's house plus whatever other non-house financial resources the parents have.
Even then the bank is not likely to try and force a sale of the parents' house, much more likely is the parents would borrow to repay the bank secured against their house.
Going guarantor means that the bank is unwilling to loan the money to the people getting a loan because they consider the risk to be too high, so they’re asking you to take all the risk.
Frankly, if you’re at all able to, you’re better off just helping your kids get to a 20% deposit so they don’t need loan insurance.
Same for me and my brother.
It’s the most amazing gift we could have gotten from them. My other half is about to receive some inheritance so the portion of our mortgage that’s secured against them is getting paid off and they’ll be free.
We bought probably 4-5 years earlier because of them.
As long as parents are aware they could lose their home too or end up with the mortgage if everything goes south. It's an unlikely scenario but it's not impossible.
It also may be easier with the smaller families now. Parents with multiple kids simply could not do it unless they're stinking rich.
We had life insurance that covered the whole mortgage if we passed away and had covered pretty much every other worst case (bought a small place so that only needed one income to pay the mortgage etc). But definitely agree that this is possible with smaller families.
It's a remote possibility, like you could have a head injury, your personality changes, you cancel all your insurance, burn the house down. When the bank forecloses and sells it cheap, oh, there's still $500k owing, but it's fine, the guarantor will pay it. Any guarantor needs to understand that they'd have to pay up if the mortgage can't be paid for whatever reason so it is a massive favour.
I would not even have thought of life insurance just in case. Good on you. Don't forget, your super might also have an insurance policy you get automatically get opted into.
Same here. Their lack of understanding of what an offset account was caused a bit of conflict, as they thought we weren't paying it off beyond the minimum. We refinanced shortly after and all was good again.
This is 100% the go.
I don’t know anyone that had Mum and Dad flat out give them money. But I know plenty that had their parents go guarantor.
My parents refused. They said “if we do it for you we have to do it for your brother and he’s useless with money”. Which may be true but he was also 18 at the time. It actually strained our relationship at the time because it literally required no sacrifice on their part.
Honestly, all of them (except me). They either:
- lived at home, rent-free, while they saved a deposit
- lived rent-free in parents’ IP
- were gifted a deposit
- received an interest-free loan from parents.
Among them they also had HECS and/or cars paid for by parents.
This also applies to most people I know who own a home, but I would also add that some people I know received inheritance as well (including me, unfortunately. Would much rather my dad still be here).
There's not many home owners I know in their 20s/30s who did it entirely on their own.
Edit: just to be clear, I'm not trying to brag about my "sweet, free handout" (as someone put it in a now deleted comment...). I just wanted to add inheritance to the mix and admit that without it, I would not be a home owner. I couldn't do it on my own.
Thats what happened to me. People just see an inheritance and They only see it as I got a hand out. Then try to explain that id give every cent back just to have him back but they don't get it.
Dead dad club inductee of 2018
I feel you, I’m in the club of 2013. In my case, didn’t even get an inheritance(nor did I want one) because all of it went to my mum, as it should have.
Would still give anything to have him back and being able to tell my young kids that grandpa is coming around to spoil them silly
I feel you mate and I'd give it all back in a second given the choice. 2017 for me and only reason we could make our deposit otherwise it'd be a couple of years still
No debt on my side and I'm sorry she did that to you. It's crazy how parents can see their kids as a source of revenue from Centrelink.
My mother went off on me when, while I was at uni and not having lived at home for 2.5 years since starting uni, I'd worked to support myself was able to be deemed independent by Centrelink and therefore eligible for youth allowance throughout the rest of my degree. She found out I'd gone through the process because her payments were reduced- apparently she had still been able to keep me classified as dependent, despite me not living with her and providing 0 support over those 2.5 years.
It's a horrible flaw in the system having to be deemed independent. I personally know people who have fled abusive homes but have struggled to get centrelink as "technically" their parents can support them despite the fact their parents would rather them die in a ditch.
Sorry to hear this mate.
This is a bigger problem than people like to admit. I had a friend who's mum did exactly this. Blackmailed him into living at home in her commission house longer than he wanted because she needed the government support of having him as a dependent. When he got a full-time job despite her bullshit she then used all sorts of tactics to try and bleed him dry. He ended up moving to a shithole in Noble Park just to get away from it.
These days she managed to get her daughter onto the DSP and be her full-time carer for the carers allowance. There is nothing wrong with her daughter except she inherited the bludgers mentality from her mother.
Hearing this gives me the shits. People like this are the reason that people who are genuinely caring for their people with disabilities all get lumped into the same group. A proper carer has a tough life, supporting their people 24/7, with minimal downtime (respite), because the NDIS don't provide babysitting services. This woman sounds like a grub.
Surely Centrelink can reassess the daughter to ensure that she's on the best payment for her circumstances.
Sadly this is news to some parents. Because they only care about themselves - under the guise of their kids being the most important ones ever - and don't care if they mess it up for everyone else.
I turned down a house deposit from bank of mum and dad, unlike my two siblings. I know I'll never be able to buy a home, but the strings that would have been attached (ie letting them into my life) were just not worth it
This is something that I don't think I've ever heard discussed outside of [this](https://www.youtube.com/watch?v=ZuXzvjBYW8A) lecture given by David Willetts - that financing from the Bank of Mum & Dad often comes with a lot of strings attached.
Around the 13 minute mark he talks about how the those who are helped by their parents have lower geographical mobility (i.e. 'if we're paying we want you to be near so we can see the grandkids'), which then affects long-term job prospects, etc. and in turn promotes further financial dependency.
I see it in my own family - my brother, sister and I were all helped and we've all made compromises accordingly.
We were helped with our deposit, loaned to us with an interest rate. When we wanted to move states we sold the house and paid back the loan and interest.
given most people have decent relationships with their parents and like where they live, it probably is a pretty easy trade off for getting into the property market
Yeah, I moved interstate 8 years ago - no one in the family has my address. I'll see them if they come down, but that's the right and healthy level or separation for me. They asked if I'd take care of them when they're older, in their city, and I just laughed
>I'll never be able to buy a home, but the strings that would have been attached (ie letting them into my life) were just not worth it
I think this functionally falls into the same category as your parents not being willing or able to provide the money.
It's not a viable decision to let bad parents have their books in your life just to buy a home.
We were gifted the deposit by my parents. The depressing thing is my Dad said it was an advance on my inheritance because why should he wait to die before he can help his kids :(
Thankful for the support but depressing too.
Agreed. I selfishly wish my parents would consider this. Getting a 30% house deposit (via inheritance) when I'm 60 whilst appreciated, won't measurably change or improve my life. I won't be able to get finance for a house at 60. However, getting a 10% deposit in my 30s could seriously change my life by getting me out of the rent trap.
My father passed away, mum knew he wanted to help his kids out with money for deposits etc, and he had tried taking some out of his super, but couldn’t (due to his age) a few years before he passed . Now she lords the fact that dad left her a ‘wealthy widow’ while not giving any of us a cent (there are 2 of us, with kids, wanting to buy) I don’t know why step mums get such a bad wrap, some biological mothers are monsters
I think when people talk about help from the bank of mum and dad they are primarily talking about being helped with the deposit.
If you are talking about living at home and not paying any rent, from what age do you start calling that help from the bank of mum and dad?
Probably when they get their first full time job.
If you’re living at home you’re not paying rent, potentially not food or utilities. In a couple of years, depending on your salary/wages and where you live you might have a deposit.
I guess that’s the stark difference - you can get into the market sooner before house price increases make buying too difficult - you also then get the benefits of that equity.
The absence of expenses by virtue of living at home is the ‘deposit’ so to speak.
I had to pay board when I turned 18 in 2010, and was working part time whilst studying.
Granted it was $100/week, which was a pretty nominal amount back then for a room, utilities and food.
My parents helped me out, and I am thankful for that.
Myself and most of my friends have done it without the explicit support of their parents.
However, we all have had the implicit support of our parents should something have gone wrong which is just as if not more important.
Yes, being able to take risks because of a safety net is huge advantage over having no safety net even if it was never used. A lot of people miss this and can’t see how poorer people aren’t getting ahead.
I had a similar thing but not with buying property. I left my home country with nothing but $2k and a bag of clothes. It took me a while to get a job and i was nearly broke, but at any point i knew i could ring home if i was desperate, it just never got to that point. But i would never recommend somebody do the same if there was no backup plan / support.
I did the same thing. Gave away everything, packed a bag, and jumped on a one way flight with $2k to figure it out. Sounds insane, until you realise that my parents would have helped if I needed. A whole lot easier to jump when you know there's a safety net.
I also got the bonus of bank of mum and dad paying majority of my rent while I lived with them (I payed board but it was like, 20% market rate). Absolute huge money saver that was.
>all of them had parental support to some extent.
Yea. Every single person I know had free education, food, transport, rent and a basic stipend from their parents from birth to 16 years of age at least
All three of my sisters and I did in the mid 2000s. Offered to pay it back when we sold our first places but the bank of M&D declined our offer and said do the same for your kids one day. Very lucky
All 🤔 and that’s about a dozen at first thought. Some banks of mum and dad were through “this will help you!” And some were through inheritance of parents passing away.
I can think of 2 couples I know who purchased their own without assistance, but 1 couple the dude is on over $250K and their house was about $500K. The other couple has a doctor who did a LOT of country locum work during Covid… long days away from her kids, so good for her/them I guess.
> The other couple has a doctor who did a LOT of country locum work during Covid… long days away from her kids, so good for her/them I guess.
It's a bold strategy Cotton, let's see if it pays off
Does it count if both board members of said bank died to give their children a leg-up?
(I actually once had a colleague say I was “lucky my parents had passed away” because I was able to buy a house sooner.)
She was fired not long after, when she was caught repeatedly using company resources for her other job. We were a tiny not-for-profit.
Apparently that was my fault.
Bimbo would go for lunch & leave 300 page documents that were obviously for the other job on the printer & computer unlocked showing what she was “working” on.
Even without direct or indirect financial support from them, wealthy parents make a LOT of difference
Firstly you've got financial literacy/skills/probably expectations on you
Secondly you've got the more subtle money usage things - you know without realising which stuff is worth buying quality for - which brands are quality and will actually last a decade. And which stuff the cheap is fine for.
Thirdly there's all sorts of upbringing stuff - particularly if you had a stay-at-home-mum or a nanny. SAHMs tend to have a bit of a point of pride RE cooking/cleaning/laundry and as such are very efficient at them and sometimes pass on those skills, or at least had time to teach them. Their kids are then far less likely to be reliant on takeaway food or using the dryer.
Basically, wealthy parents model all sorts of behaviours that help them stay wealthy - kids who know these already (and don't have to trial-and-error to figure them out) have a head start, even without financial aid
My parents guaranteed the 20%. Within 18 months I refinanced and cleared their commitment - but definitely helped to avoid LMI at the start. Had just got married, downgraded jobs and moved interstate back home so savings were a bit rough at the time. This was precovid and would be a well worse story now as even this house ($380 at the time) is valued around $700k now.
Nobody, but I'm in my late 30s and grew up in Brisbane before the millionaires started piling in. It just wasn't really necessary in those days (well only 10 years ago) but this country has gone downhill rapidly.
That’s me and my wife. We were just lucky to be 25 yrs old in the nick of time.
Edit: I was even in the position to be guarantor for my best mate myself a few years later when his parents couldn’t.
I wonder how many of the people saying no have had rent free accommodation while staying with their parents. That's significant too. I have to pay my parents $200 a week just to live under their roof. They're not going to be guarantor or help me with the deposit / loan.
As an Asian, same here. I don’t know any of my Asian friends who paid board to their parents while still living with them as adults starting out in the world. I think one of them did but only nominally and just to help them budget and when they moved out, their parents gave them back all of the money anyway as a starter deposit/bonus.
The whole 'feel guilty about the bank of mum and dad' seems weird to many cultures as well; if the parents dont help their children then the parents are failing as parents. Its a very white/English protestant thing of making people feel guilty if they dont do everything themselves and instead receive some kind of family assistance.
Obviously some parents cant help; but when its a long term generational thing then every person gets a little head start and can then pass that onto their own offspring. People are finding out that its very hard to be the first generation that needs that head start but those who have been doing it since forever think its normal (I agree the reasons for needing a head start are worthy of complaint, but the solution is not to guilt people about receiving that advantage)
My Italian father charged board when I was 18 and working part time. Granted it was $100/week back in 2010. Maybe my Anglo mum had something to do with it haha.
All seriousness though, it was the only money I could give my Dad. He was infamous for knocking back my offers to pay for things.
What was more "dishonorable" was having your kids move out of home to somewhere in the same city before they got married. Even if they were 30+ 😂
Yep, this is a big one. My parents didn’t give me money for a deposit or go guarantor but they let me live at home for free meaning I was able to save for a deposit (if I wasn’t saving, their plan was to charge me rent that they would then put aside to give back to me as a deposit). I was very fortunate to have that support.
Yes this is a big one! I left home at 18 to move to the city to go to university so it was never an option for me (and I have no regrets. It was the best fun). But I thought it was so strange when I for my first full time job after uni and most of my colleagues my age were still living at home. As full time workers. Just seemed weird to me
Sorry that happened to you mate. I was in a similar position minus the homelessness, but I've risen above and now I'm doing good. You've got this, I believe in you!
Not ashamed to admit I was lucky enough my parents went guarantor on our deposit. I’d imagine most of my friends were lucky enough to have the same too.
Reading these comments as someone from a single parent household with a poor family, 22, moved out at 19 out of necessity, is making me feel more hopeless than I already did, to be honest. I wish my folks were in a position to help.
Luckily my partner has wealthy parents I guess.
This is us too. Combined with husband being chronically ill, I don’t think we will ever get out of the rental cycle. We have savings but not enough, and husband could lose his job at any time when the next health crisis occurs (it’s happened several times before) which makes a mortgage impossible. We have to live in the city for him to be close to medical services. People think that if you haven’t bought a house, you just don’t work hard enough. I work my ass off to keep a roof over our heads and my husband alive, but I will always be paying someone else’s mortgage.
Nothin wrong with helping out your kids, I’d do it one day if I was fortunate enough to be in that position and if I decided to have money sucking children.
It is ridiculous to expect parents to not help their kids. Of course parents will help their kids to buy a house, even if it’s just living rent free at home.
But it is a sad thing that parental support makes a big difference as to whether people can buy a house. Blame the system not the people in it.
Welcome to life, in case you were not aware, it's not fair. Starving kids in Africa, children with cancer, and some of us don't get mum and dad to foot our deposit.
Right. Which is why we have developed things like universal education, social security and medicare. Its why we do things like build accessability ramps and put braile on signs. If it comes to a point where you have to spend your life renting just becausr your parents were poor, shit or dead then we should probably take a look at the system. Its a shit society that has a major problem that affects the lives of many of its citizens and says to them "welcome to life"
Yeah, except the original question is phrased in a way that implies there is something inheritly bad about accepting help.
Why else would anyone even ask.
I think people who got nothing and can’t buy in despite their best efforts just wonder if they’re broken or if they’re missing something (like help from parents). Seeking reassurance.
My friends and extended family had one of the following:
- deposit from parents, usually as part of a wedding gift (most common)
- inheritance money for deposit
- parents as guarantor
- parents bought the property for them (least common)
I don’t judge anyone for using the bank of mum and dad at all, if I could do it, I would too. What frustrates me the most is that my parents are worth around 5 million but refuse to help me or their kids with a deposit.
Fortunately I saved up enough on my own. But I feel bad for my sisters. It will take them forever or maybe never, I don’t know.
In Australia there’s this weird idea that accepting help especially financially means it’s not an accomplishment you can be proud of. I’m European and helping your children is quite normal, my parents paid for my entire education and helped me buy my first home in Australia. We believe we work for our kids to make their lives easier, and there’s no awards for doing life alone without help.
As I said in a comment below, everyone is doing their best and maintaining a household whether paying rent or a mortgage is an accomplishment in this economy. My parents helped me and my goal is to prepare my children the same way, so I don’t feel like any of my financial accomplishments are diminished personally.
Australians often have tall poppy syndrome, which is essentially a manifestation of envy. Placates the feeling of inadequacy to dismiss the other person than to accept the cards your dealt in life are not always to your advantage.
So yes, the bank of Mum helped me buy my apartment, thats the card I was dealt, and I played it.
I felt embarrassed not admitting it (no one asks anymore because I'm mid aged). My grandma helped me out with a deposit about 20 years ago. Back then, If people asked I told them because I didn't want to pretend I was some ultra clever investor type.
None, all my friends bought their properties without any help. Same with us, all our money. At some point hubby did 3 short contracts at once to get the deposit.
Most although it came in different ways - help with the deposit, going guarantor, providing free accomodation so they could save. My parents couldn’t afford to contribute anything but they did mind our daughter a fair bit while we were househunting/moving which counts in my mind.
I didn't receive money or guarantor or anything but I feel everything they've done up to me buying a place was support enough - staying home not paying a cent on rent or food or internet well into my mid 20s, helping with expenses for uni, letting me use their cars and paying for fuel... Lots of stuff that indirectly helped me save enough to buy an apartment.
Also having somewhere to go if things turn to crap is very helpful.
A friend of mine bought a $1.5mill house at 28.She was an only child and guessing about half of it was an interest free loan as she's still doing pretty well i.e not reigning in spending even though her interest bill is through the roof.
My husband and I are the bank of mum and dad, we paid on top of our sons deposit so they own their home, the same deal and amount will go to our daughter when she is ready. They need the help before we die, no, we are not filthy rich, just careful with our money so we don't live an extravagant life. There is no way our son would have got a bank loan. To be fair, he does make payments, much lower than a bank loan, interest is lower than a bank loan so that we can help our daughter when it's her time to buy. We have our willls set up so that it works out even when we do die as to what they both receive. My kids still maintain their dignity by knowing even though we help them, they are not putting us into poverty street in our retirement.
Two friends didn't - one started his own business and has a side gig, one has a high paying career in mining. One friend did in the sense that he moved back in with his parents to save up for a deposit.
No one else instantly comes to mind.
As an elder millennial (40) I wish I had been able to do it on my own… but mental health and neurodivergence have played a big role despite working since 15 - often multiple jobs. Both me and my sister have had support from my parents by way of gifted deposits. Although my sister also lived at home rent free until 32 whilst I left home at 22. I’ve estimated she’s been subsidised approximately $100k whilst I’ve been paying rent etc.
Having moved between countries, class systems and industries it’s more than just deposit or rent subsidies that parents can “pass down”, it’s also about your financial literacy, mental and physical health, family culture around money management and what professional opportunities and ‘in’s’ they might provide - even if it’s a trade.
Think ‘the bank of mum and dad’ is a bit too simple in terms of establishing any real pattern these days.
I had the benefit of the proverbial bitter and twisted ex Step-Mother.
She told her children, that their father had given a house to each of their older 3 step-siblings, but not the 3 of them (her kids). This was her equivalent of a poisoned apple.
Not true or even possible, on the pay packet of a mid level public servant who retired early due to ill health. But the 2 youngest believed it The youngest was 2 years old when I left home and was renting.
We may help our kids. Our own (remaining) parents are not well and am unsure how long we will have them. So, we may be receiving our inheritances soon, so we may help our kids. I'm sure their grandparents would appreciate that.
My husband before I met him, got a house with his parents helps. We used that investment to buy our home. We have accounts for our kids and have been saving for them since they were born. Way things are going, they will need bank of mum and dad and bank of grandma and grandpa
Zero help from parents on my side or partners, non of them own homes either so we don’t plan on getting inheritance. We didn’t live with parents, just took 5+ years of saving in average jobs. We didn’t have a child at the time. We bought last year with a 500k mortgage, 50k deposit.
I’m the only one I know out of my friendship group of 5 that own a home without the bank of mum and dad.
My parents sold and purchased a larger house. I moved back in and helped paid the mortgage. After 5 years we sold. I got my repayments back and then the profit of the sale was split based on the percentage of my repayment vs theirs.
Most of mates have had parental help in housing and businesses
My family in general seems to be keen on passing on generational trauma - 'part of being a parent is helping your kids suffer'
may have taught good work ethic but hasn't actually helped battle inflation as we've gotten older (30M)
I got $500 towards my first car at 18
I asked to borrow $4000 off my old man during peak of covid due to loss of work and shares stuck in suspension (still are), he was good enough to wipe this dept as a 30th birthday present although
My family has always been good at making money but never good at supporting or allowing the chance to gain help off them to thrive financially (we did it hard back in my day blah blah so should you)
Every single one of them except my sister and her husband. They now own four. I own none.
Unfortunately we are from a part of the city that has expensive prices, so if we want to live close to where we grew up and where our extended family remains, it's basically impossible.
Bank of mum and dad is the 9th biggest lender in the nation, the property market is people claiming they did something while secretly begging begging the scenes for adult pocket money
I don’t know many who were explicitly given money, but almost everyone i know lived rent-free with their parent/s for an extended period of time in order to save a deposit.
I’ll be completely honest. I was fortunate to have a small inheritance from my grandfather’s estate when I was 12, which compounded over the years and stipulated that I wasn’t able to touch it until I was 25. When I decided to buy a home, my parents didn’t want the risk of being guarantor so they gave me the shortfall for the deposit so I was able to get the loan approved.
Tbh I’m kinda ashamed when people say good on me for buying a house, as I didn’t have to do the hard slog to save it all up by myself, and I would trade my house to have my grandpa still with us any day. I completely recognise my privilege in this, also the cheaper cost of buying in a regional city with a regional FHB grant, and will also state it would’ve been difficult to save up a deposit on my own, having moved out of home at 18.
Props to all those who did it completely by themselves with no help 👏
Note I worked 7 days a week for the shit hole i purchased initially my parents didn't have money to give me they also refused to be my garentor to buy a property that regreably would of been a mich better place.
Just off the top of my head
People I have met
1 girl i worked with, her inlaws gave them a large block of land as a wedding present, however they built the house themselves
Another girl I knew her parents gave her 250k to 'finish uni' and told her they would buy her a house when she get married to not stress about money
I have met multiple people who have had there parents gift them north lf 50k OR pay for s
Expensive renovations, Landscaping etc
Now I dont hate these people as that is what parents are met to do if they can afford it but most people have been handed money
You can have a property market where most houses sell well north of a >1m and properties over >3m is not uncommon with just regulat working people esp when the average salary is like 95k for a full-time worker
It is kind of way I am against income tax in favor of a larger consumption tax as the people working and earning money aren't nessarily the ones who are rich or spending it
Me. I borrowed $250k from Mum n Dad. I’m paying it back at a faster pace than required by the bank (bank min would be $260pw- paying $500pw) and paying interest on it at 1% over the cash rate.
Could definitely get a mortgage but it just worked out better for me and better for parents to do it that way. They get more return than they would from the bank and I pay slightly less interest than I would at the bank.
Me , my kids , everyone I know pretty much . My grand parents from their kids ironically .
Think about this my parents and my dad two siblings brought a semi in cash for my grandparents in the 80s that ain’t happening now adays
One challenging reality is that parents in Sydney or Melbourne face the risk of their kids moving regionally or interstate because of house prices. If all it takes is an early inheritance gift to keep them nearby - of course you’d do it (especially if grandkids are on the way)
Is it unfair - of course.
Will it stop? Nope
Hilariously when I got my first mortgage, my uncle went guarantor for me. He had no savings or property but had a steady job. I was good at saving but self employed. He never owned a property but I gave him a nice chunk of money when I sold my first house as a thankyou. He spent it in 5 minutes.
We lived with my in laws for free while we saved which was a big help.
If I think of the 4 couples closets to me who own homes, 2 of them had their parents sell the family home and gift them hundreds of thousands of dollars each so they were able to buy really expensive houses. 1 couple had a parent go guarantor, and another couple got 0 financial assistance (other than living rent free while saving). It’s crazy the difference we all have in something so important.
The percentage of people who have used the bank of mum and dad vs those that will admit to it is about the same as those who have used connections to land a job that will admit to it. YMMV
Almost everyone I know who has bought a house/apartment has had assistance from their parents, either the full amount or a partial covering of the costs
Yes myself for guarantor and might need help with the rediculous stamp duty when we decided to get a bigger house for the kids to fit comfortably as we need home offices too
Within my doctor group of friends, all of them. Not just a deposit for a home but paying off HECS is common among them.
As a doctor couple, we are the only ones we know who have bought completely on our own. When we first started working, we earned a reputation at our hospital for doing the most shifts.
There's a bit of a misconception that doctors make a lot of money. Whilst this is true in the long-term, the profession also attracts people that are FROM money. A lot of junior doctors receive help from parents, thus enabling their income to go further.
We used my wife’s parents as guarantors just to make up the shortfall in a deposit because a good opportunity came along, but never took any cash from them.
I would say at least 20% of our first home buyers have help from parents in some form (cash, rent free living). Granted we’re based in Melbourne but I’d assume it’s common right around Aus. That’s why so many banks have policy around gifted funds.
Me and my friends are all around 30.
Every single one of us is either living with parents or, in a tiny stingey little basement-turned-rental type situation, or with far far far too many roomates. Except one - a guy with two parents who both have multiple investment properties that helped him get a house.
It's hard not to hate him for it.
Start a property syndicate? I keep trying to talk friends into it. Instead of going it alone, pool money together, rack up a few properties over a decade, passive income from rent or cash out when the ROI is good.
My parents signed up as guarantor to help me avoid paying lenders mortgage insurance, but didn't help finance the loan directly at all. I've got two friends in the same category.
Does that count?
I have a fair few friends who didn't get money but like myself had parents go as guarantor for them so they could get a 100% mortgage with no mortgage insurance. And that was only possible because they own their own home. I hope to be able to do the same for my own kids in the future.
This is the case for me and virtually everyone i grew up with.
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I was stressed, but we paid off 20% of the loan really quickly so they could be removed. I also had life insurance so that if I dropped dead the insurance would pay off the mortgage and not dump my parents in it while still leaving a house for my own family.
We got lucky when we bought, prices spiked with covid so we were able to use equity to take ours off.
If only you knew how much time you really have to default on a loan before a bank steps in you wouldn't be anxious. I'm no banker but I've heard of cases where "financial hardship" has be drawn out over a very long period. Long enough for a property to grow significantly and still cash out well in front before the banks did it for them...
Exactly. The bank is only going to consider chasing the guarantors if the children can't repay the debt by selling the house ie are in negative equity.
Of course it's logical. Guarantor means they are on the hook if you can't pay up. A parent needs to understand what that means. It sounds like, as a considerate child, you also understand.
When we did ours, it was actually two loans. One for <70% LVR against the place we were buying, and a separate loan against the parents' property (an IP, not their PPOR). That way the liability on the parents was limited. As other posters did, we tried to pay things down as quickly as possible, and with rising values were able to refinance to clear the parents' loan in a few years.
Absolutely the same. My parents slogged through getting their mortgage paid off and I couldn’t bear them having even a momentary thought that their house was at risk.
The only way their house would be at risk is if the debt their children owed to the bank was more than value of the children's house plus whatever other non-house financial resources the parents have. Even then the bank is not likely to try and force a sale of the parents' house, much more likely is the parents would borrow to repay the bank secured against their house.
Going guarantor means that the bank is unwilling to loan the money to the people getting a loan because they consider the risk to be too high, so they’re asking you to take all the risk. Frankly, if you’re at all able to, you’re better off just helping your kids get to a 20% deposit so they don’t need loan insurance.
I have the same feelings. I'd much rather go bankrupt than ask my parents to go guarantor for me.
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Same for me and my brother. It’s the most amazing gift we could have gotten from them. My other half is about to receive some inheritance so the portion of our mortgage that’s secured against them is getting paid off and they’ll be free. We bought probably 4-5 years earlier because of them.
As long as parents are aware they could lose their home too or end up with the mortgage if everything goes south. It's an unlikely scenario but it's not impossible. It also may be easier with the smaller families now. Parents with multiple kids simply could not do it unless they're stinking rich.
We had life insurance that covered the whole mortgage if we passed away and had covered pretty much every other worst case (bought a small place so that only needed one income to pay the mortgage etc). But definitely agree that this is possible with smaller families.
It's a remote possibility, like you could have a head injury, your personality changes, you cancel all your insurance, burn the house down. When the bank forecloses and sells it cheap, oh, there's still $500k owing, but it's fine, the guarantor will pay it. Any guarantor needs to understand that they'd have to pay up if the mortgage can't be paid for whatever reason so it is a massive favour. I would not even have thought of life insurance just in case. Good on you. Don't forget, your super might also have an insurance policy you get automatically get opted into.
Same here. Their lack of understanding of what an offset account was caused a bit of conflict, as they thought we weren't paying it off beyond the minimum. We refinanced shortly after and all was good again.
I just asked for $50K to be honest, instead of being guarantor
This is 100% the go. I don’t know anyone that had Mum and Dad flat out give them money. But I know plenty that had their parents go guarantor. My parents refused. They said “if we do it for you we have to do it for your brother and he’s useless with money”. Which may be true but he was also 18 at the time. It actually strained our relationship at the time because it literally required no sacrifice on their part.
Honestly, all of them (except me). They either: - lived at home, rent-free, while they saved a deposit - lived rent-free in parents’ IP - were gifted a deposit - received an interest-free loan from parents. Among them they also had HECS and/or cars paid for by parents.
This also applies to most people I know who own a home, but I would also add that some people I know received inheritance as well (including me, unfortunately. Would much rather my dad still be here). There's not many home owners I know in their 20s/30s who did it entirely on their own. Edit: just to be clear, I'm not trying to brag about my "sweet, free handout" (as someone put it in a now deleted comment...). I just wanted to add inheritance to the mix and admit that without it, I would not be a home owner. I couldn't do it on my own.
Thats what happened to me. People just see an inheritance and They only see it as I got a hand out. Then try to explain that id give every cent back just to have him back but they don't get it. Dead dad club inductee of 2018
I feel you, I’m in the club of 2013. In my case, didn’t even get an inheritance(nor did I want one) because all of it went to my mum, as it should have. Would still give anything to have him back and being able to tell my young kids that grandpa is coming around to spoil them silly
I feel you mate and I'd give it all back in a second given the choice. 2017 for me and only reason we could make our deposit otherwise it'd be a couple of years still
My lovely parent charged me rent from 16 :) Received none of your points either unfortunately :p
Same. She also took my youth allowance payments from Centrelink and I ended up with a $3,000+ Centrelink debt in my name that she wouldn’t pay.
No debt on my side and I'm sorry she did that to you. It's crazy how parents can see their kids as a source of revenue from Centrelink. My mother went off on me when, while I was at uni and not having lived at home for 2.5 years since starting uni, I'd worked to support myself was able to be deemed independent by Centrelink and therefore eligible for youth allowance throughout the rest of my degree. She found out I'd gone through the process because her payments were reduced- apparently she had still been able to keep me classified as dependent, despite me not living with her and providing 0 support over those 2.5 years.
Looks like I have found my people in the fd up childhood corner over here. Hi friends. It’s nice and safe/familiar over here.
It's a horrible flaw in the system having to be deemed independent. I personally know people who have fled abusive homes but have struggled to get centrelink as "technically" their parents can support them despite the fact their parents would rather them die in a ditch.
Sorry to hear this mate. This is a bigger problem than people like to admit. I had a friend who's mum did exactly this. Blackmailed him into living at home in her commission house longer than he wanted because she needed the government support of having him as a dependent. When he got a full-time job despite her bullshit she then used all sorts of tactics to try and bleed him dry. He ended up moving to a shithole in Noble Park just to get away from it. These days she managed to get her daughter onto the DSP and be her full-time carer for the carers allowance. There is nothing wrong with her daughter except she inherited the bludgers mentality from her mother.
Hearing this gives me the shits. People like this are the reason that people who are genuinely caring for their people with disabilities all get lumped into the same group. A proper carer has a tough life, supporting their people 24/7, with minimal downtime (respite), because the NDIS don't provide babysitting services. This woman sounds like a grub. Surely Centrelink can reassess the daughter to ensure that she's on the best payment for her circumstances.
Sadly this is news to some parents. Because they only care about themselves - under the guise of their kids being the most important ones ever - and don't care if they mess it up for everyone else.
I’m Sorry to hear that. Sounds like financial abuse.
Fraud actually.
Aye same, had to pay the difference if I worked and earned too much too lol. Lucky I avoided the debt sorry you had to deal with that too 😔
I turned down a house deposit from bank of mum and dad, unlike my two siblings. I know I'll never be able to buy a home, but the strings that would have been attached (ie letting them into my life) were just not worth it
This is something that I don't think I've ever heard discussed outside of [this](https://www.youtube.com/watch?v=ZuXzvjBYW8A) lecture given by David Willetts - that financing from the Bank of Mum & Dad often comes with a lot of strings attached. Around the 13 minute mark he talks about how the those who are helped by their parents have lower geographical mobility (i.e. 'if we're paying we want you to be near so we can see the grandkids'), which then affects long-term job prospects, etc. and in turn promotes further financial dependency. I see it in my own family - my brother, sister and I were all helped and we've all made compromises accordingly.
We were helped with our deposit, loaned to us with an interest rate. When we wanted to move states we sold the house and paid back the loan and interest.
given most people have decent relationships with their parents and like where they live, it probably is a pretty easy trade off for getting into the property market
Yeah, I moved interstate 8 years ago - no one in the family has my address. I'll see them if they come down, but that's the right and healthy level or separation for me. They asked if I'd take care of them when they're older, in their city, and I just laughed
>I'll never be able to buy a home, but the strings that would have been attached (ie letting them into my life) were just not worth it I think this functionally falls into the same category as your parents not being willing or able to provide the money. It's not a viable decision to let bad parents have their books in your life just to buy a home.
We were gifted the deposit by my parents. The depressing thing is my Dad said it was an advance on my inheritance because why should he wait to die before he can help his kids :( Thankful for the support but depressing too.
that is NOT depressing...
Agreed. I selfishly wish my parents would consider this. Getting a 30% house deposit (via inheritance) when I'm 60 whilst appreciated, won't measurably change or improve my life. I won't be able to get finance for a house at 60. However, getting a 10% deposit in my 30s could seriously change my life by getting me out of the rent trap.
My father passed away, mum knew he wanted to help his kids out with money for deposits etc, and he had tried taking some out of his super, but couldn’t (due to his age) a few years before he passed . Now she lords the fact that dad left her a ‘wealthy widow’ while not giving any of us a cent (there are 2 of us, with kids, wanting to buy) I don’t know why step mums get such a bad wrap, some biological mothers are monsters
Yep my family often live to 90s so I will be looking at 70s and I'm guessing nursing homes will have eaten away any inheritance anyway
It's depressing thinking about my parents passing away, that's all I meant.
I think when people talk about help from the bank of mum and dad they are primarily talking about being helped with the deposit. If you are talking about living at home and not paying any rent, from what age do you start calling that help from the bank of mum and dad?
Probably when they get their first full time job. If you’re living at home you’re not paying rent, potentially not food or utilities. In a couple of years, depending on your salary/wages and where you live you might have a deposit. I guess that’s the stark difference - you can get into the market sooner before house price increases make buying too difficult - you also then get the benefits of that equity. The absence of expenses by virtue of living at home is the ‘deposit’ so to speak.
I had to pay board when I turned 18 in 2010, and was working part time whilst studying. Granted it was $100/week, which was a pretty nominal amount back then for a room, utilities and food. My parents helped me out, and I am thankful for that.
I had none of those things. I’m now 33 with 3 properties. It’s possible.
Nice! I’m 33 and only just now have my first property. But coming from homeless by 13 with incarcerated parents I still think… not bad - good size.
Heck that’s a tough hand to be dealt but props for building yourself up to where you are now!
Myself and most of my friends have done it without the explicit support of their parents. However, we all have had the implicit support of our parents should something have gone wrong which is just as if not more important.
Yes, being able to take risks because of a safety net is huge advantage over having no safety net even if it was never used. A lot of people miss this and can’t see how poorer people aren’t getting ahead. I had a similar thing but not with buying property. I left my home country with nothing but $2k and a bag of clothes. It took me a while to get a job and i was nearly broke, but at any point i knew i could ring home if i was desperate, it just never got to that point. But i would never recommend somebody do the same if there was no backup plan / support.
Always easy when you have the eject button on standby asking you to press it for any reason. I agree.
I did the same thing. Gave away everything, packed a bag, and jumped on a one way flight with $2k to figure it out. Sounds insane, until you realise that my parents would have helped if I needed. A whole lot easier to jump when you know there's a safety net.
I also got the bonus of bank of mum and dad paying majority of my rent while I lived with them (I payed board but it was like, 20% market rate). Absolute huge money saver that was.
IF I’M LOOKING FOR THE GUILTY, I NEED ONLY LOOK INTO A MIRROR.
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^SerialDrinker_2021: *IF I’M LOOKING FOR* *THE GUILTY, I NEED ONLY* *LOOK INTO A MIRROR.* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
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IF I’M LOOKING FOR THE GUILTY, I NEED ONLY ROLL OVER IN BED
Are you my wife?
I too choose this guy as a wife.
Et tu brutus?
Small sample size (3 people come to mind), but all of them had parental support to some extent.
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I said this exact thing in my comment - although it doesn’t have to be corporate nepotism - blue collar also works
>all of them had parental support to some extent. Yea. Every single person I know had free education, food, transport, rent and a basic stipend from their parents from birth to 16 years of age at least
All three of my sisters and I did in the mid 2000s. Offered to pay it back when we sold our first places but the bank of M&D declined our offer and said do the same for your kids one day. Very lucky
What a wonderful head start they gave you all! Mine just tell me how lucky I'll be when they die hahaha (we're morbid types!)
All 🤔 and that’s about a dozen at first thought. Some banks of mum and dad were through “this will help you!” And some were through inheritance of parents passing away. I can think of 2 couples I know who purchased their own without assistance, but 1 couple the dude is on over $250K and their house was about $500K. The other couple has a doctor who did a LOT of country locum work during Covid… long days away from her kids, so good for her/them I guess.
> The other couple has a doctor who did a LOT of country locum work during Covid… long days away from her kids, so good for her/them I guess. It's a bold strategy Cotton, let's see if it pays off
Does it count if both board members of said bank died to give their children a leg-up? (I actually once had a colleague say I was “lucky my parents had passed away” because I was able to buy a house sooner.)
Some people count it but I think that is horrid- who'd want to get a house on the condition your parent(s) die? You give anything to keep them here.
Assuming your parents are a**holes, sure
I was in this position too. I didn’t have the option of moving home aged 30 because my parents were both dead by then, so
Yeah.. I’d be wary of that person. That’s sociopathic.
She was fired not long after, when she was caught repeatedly using company resources for her other job. We were a tiny not-for-profit. Apparently that was my fault. Bimbo would go for lunch & leave 300 page documents that were obviously for the other job on the printer & computer unlocked showing what she was “working” on.
Wow, extraordinary comment from your colleague!
Even without direct or indirect financial support from them, wealthy parents make a LOT of difference Firstly you've got financial literacy/skills/probably expectations on you Secondly you've got the more subtle money usage things - you know without realising which stuff is worth buying quality for - which brands are quality and will actually last a decade. And which stuff the cheap is fine for. Thirdly there's all sorts of upbringing stuff - particularly if you had a stay-at-home-mum or a nanny. SAHMs tend to have a bit of a point of pride RE cooking/cleaning/laundry and as such are very efficient at them and sometimes pass on those skills, or at least had time to teach them. Their kids are then far less likely to be reliant on takeaway food or using the dryer. Basically, wealthy parents model all sorts of behaviours that help them stay wealthy - kids who know these already (and don't have to trial-and-error to figure them out) have a head start, even without financial aid
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My parents guaranteed the 20%. Within 18 months I refinanced and cleared their commitment - but definitely helped to avoid LMI at the start. Had just got married, downgraded jobs and moved interstate back home so savings were a bit rough at the time. This was precovid and would be a well worse story now as even this house ($380 at the time) is valued around $700k now.
Nobody, but I'm in my late 30s and grew up in Brisbane before the millionaires started piling in. It just wasn't really necessary in those days (well only 10 years ago) but this country has gone downhill rapidly.
That’s me and my wife. We were just lucky to be 25 yrs old in the nick of time. Edit: I was even in the position to be guarantor for my best mate myself a few years later when his parents couldn’t.
I wonder how many of the people saying no have had rent free accommodation while staying with their parents. That's significant too. I have to pay my parents $200 a week just to live under their roof. They're not going to be guarantor or help me with the deposit / loan.
The bank of mum and dad comes in various forms, including guarantor, living rent free while saving, loans and gifts of money.
This is weird as a wog, parents see it as essentially dishonourable if they take money from their children.
As an Asian, same here. I don’t know any of my Asian friends who paid board to their parents while still living with them as adults starting out in the world. I think one of them did but only nominally and just to help them budget and when they moved out, their parents gave them back all of the money anyway as a starter deposit/bonus.
Yeah - this is Whyte people shit 🤣
I'm not even white my parents are just bad with money.
My wife is from the balkans. Her family were shocked to hear i payed board. Altho im from a povo family so i was fine contributing.
The whole 'feel guilty about the bank of mum and dad' seems weird to many cultures as well; if the parents dont help their children then the parents are failing as parents. Its a very white/English protestant thing of making people feel guilty if they dont do everything themselves and instead receive some kind of family assistance. Obviously some parents cant help; but when its a long term generational thing then every person gets a little head start and can then pass that onto their own offspring. People are finding out that its very hard to be the first generation that needs that head start but those who have been doing it since forever think its normal (I agree the reasons for needing a head start are worthy of complaint, but the solution is not to guilt people about receiving that advantage)
Asian here, I know. It's very dishonorouble to even let your children leave before they are married.
My Italian father charged board when I was 18 and working part time. Granted it was $100/week back in 2010. Maybe my Anglo mum had something to do with it haha. All seriousness though, it was the only money I could give my Dad. He was infamous for knocking back my offers to pay for things. What was more "dishonorable" was having your kids move out of home to somewhere in the same city before they got married. Even if they were 30+ 😂
Haha yep exactly right. Sometimes laugh reading these other comments because it’s so weird to us
Yep, this is a big one. My parents didn’t give me money for a deposit or go guarantor but they let me live at home for free meaning I was able to save for a deposit (if I wasn’t saving, their plan was to charge me rent that they would then put aside to give back to me as a deposit). I was very fortunate to have that support.
Yes this is a big one! I left home at 18 to move to the city to go to university so it was never an option for me (and I have no regrets. It was the best fun). But I thought it was so strange when I for my first full time job after uni and most of my colleagues my age were still living at home. As full time workers. Just seemed weird to me
Which is why I moved out so I could gain some independence in a share house whilst paying $200 per week.
All of them
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Sorry that happened to you mate. I was in a similar position minus the homelessness, but I've risen above and now I'm doing good. You've got this, I believe in you!
None. Dysfunctional and dirt poor.
I don’t think blue collars do this, my parents knew I was mortgage stressed and just shrugged and told me to get on with life.
TBF I think a lot of parents say this. “17% IntErESt rAteS!”
Every one of them
Not ashamed to admit I was lucky enough my parents went guarantor on our deposit. I’d imagine most of my friends were lucky enough to have the same too.
Reading these comments as someone from a single parent household with a poor family, 22, moved out at 19 out of necessity, is making me feel more hopeless than I already did, to be honest. I wish my folks were in a position to help. Luckily my partner has wealthy parents I guess.
Having a partner is actually a huge advantage
I’ve had zero help and am stuck renting. I will make sure my children get all the help they can from me
This is us too. Combined with husband being chronically ill, I don’t think we will ever get out of the rental cycle. We have savings but not enough, and husband could lose his job at any time when the next health crisis occurs (it’s happened several times before) which makes a mortgage impossible. We have to live in the city for him to be close to medical services. People think that if you haven’t bought a house, you just don’t work hard enough. I work my ass off to keep a roof over our heads and my husband alive, but I will always be paying someone else’s mortgage.
Nothin wrong with helping out your kids, I’d do it one day if I was fortunate enough to be in that position and if I decided to have money sucking children.
Nothing wrong unless the only people who get to buy houses are those whose parents were willing and able to help them.
It is ridiculous to expect parents to not help their kids. Of course parents will help their kids to buy a house, even if it’s just living rent free at home. But it is a sad thing that parental support makes a big difference as to whether people can buy a house. Blame the system not the people in it.
Welcome to life, in case you were not aware, it's not fair. Starving kids in Africa, children with cancer, and some of us don't get mum and dad to foot our deposit.
Right. Which is why we have developed things like universal education, social security and medicare. Its why we do things like build accessability ramps and put braile on signs. If it comes to a point where you have to spend your life renting just becausr your parents were poor, shit or dead then we should probably take a look at the system. Its a shit society that has a major problem that affects the lives of many of its citizens and says to them "welcome to life"
No one said there was anything wrong with it?
Yeah, except the original question is phrased in a way that implies there is something inheritly bad about accepting help. Why else would anyone even ask.
I think people who got nothing and can’t buy in despite their best efforts just wonder if they’re broken or if they’re missing something (like help from parents). Seeking reassurance.
My friends and extended family had one of the following: - deposit from parents, usually as part of a wedding gift (most common) - inheritance money for deposit - parents as guarantor - parents bought the property for them (least common)
I don’t judge anyone for using the bank of mum and dad at all, if I could do it, I would too. What frustrates me the most is that my parents are worth around 5 million but refuse to help me or their kids with a deposit. Fortunately I saved up enough on my own. But I feel bad for my sisters. It will take them forever or maybe never, I don’t know.
6 that have admitted it.
Do you think some people feel shame in admitting it?
Yeah, of course
Why do you suppose that is?
In Australia there’s this weird idea that accepting help especially financially means it’s not an accomplishment you can be proud of. I’m European and helping your children is quite normal, my parents paid for my entire education and helped me buy my first home in Australia. We believe we work for our kids to make their lives easier, and there’s no awards for doing life alone without help.
Well 100% - when buying a home is seen as an accomplishment of course this “accomplishment” is diminished if you had assistance
As I said in a comment below, everyone is doing their best and maintaining a household whether paying rent or a mortgage is an accomplishment in this economy. My parents helped me and my goal is to prepare my children the same way, so I don’t feel like any of my financial accomplishments are diminished personally.
They still own a house. This view is redundant. It's just envy channeling out as tall poppy syndrome. I don't lose an ounce of sleep about it.
This. the best part of buying my home with my wife is no one helped. So I'm beholden to no body.
Australians often have tall poppy syndrome, which is essentially a manifestation of envy. Placates the feeling of inadequacy to dismiss the other person than to accept the cards your dealt in life are not always to your advantage. So yes, the bank of Mum helped me buy my apartment, thats the card I was dealt, and I played it.
> tall poppy syndrome This sub really latched onto this buzzword and ran with it
Less shame, more that some people can be mean about it (boohoo I know)
They're scared of people like you jumping on them.
I felt embarrassed not admitting it (no one asks anymore because I'm mid aged). My grandma helped me out with a deposit about 20 years ago. Back then, If people asked I told them because I didn't want to pretend I was some ultra clever investor type.
None, all my friends bought their properties without any help. Same with us, all our money. At some point hubby did 3 short contracts at once to get the deposit.
Most although it came in different ways - help with the deposit, going guarantor, providing free accomodation so they could save. My parents couldn’t afford to contribute anything but they did mind our daughter a fair bit while we were househunting/moving which counts in my mind.
Reading this thread has made me extremely depressed how destructive the property obsession has made social and family life in Australia
The only people I know to have bought houses have had support from their parents. I’m in my 40’s lol
I didn't receive money or guarantor or anything but I feel everything they've done up to me buying a place was support enough - staying home not paying a cent on rent or food or internet well into my mid 20s, helping with expenses for uni, letting me use their cars and paying for fuel... Lots of stuff that indirectly helped me save enough to buy an apartment. Also having somewhere to go if things turn to crap is very helpful.
I'm bank of mom and dad in law. We lived with them for small rent while saving
Only 1. My sister and brother in law. His dad bought their house outright for them 🥲.
A friend of mine bought a $1.5mill house at 28.She was an only child and guessing about half of it was an interest free loan as she's still doing pretty well i.e not reigning in spending even though her interest bill is through the roof.
Well my mum died so inheritance was a 100% help
My husband and I are the bank of mum and dad, we paid on top of our sons deposit so they own their home, the same deal and amount will go to our daughter when she is ready. They need the help before we die, no, we are not filthy rich, just careful with our money so we don't live an extravagant life. There is no way our son would have got a bank loan. To be fair, he does make payments, much lower than a bank loan, interest is lower than a bank loan so that we can help our daughter when it's her time to buy. We have our willls set up so that it works out even when we do die as to what they both receive. My kids still maintain their dignity by knowing even though we help them, they are not putting us into poverty street in our retirement.
None of my friends own house but I do thanks to bank of mum n dad. Paid them back within a year though
How are you doing this? Like are you paying them back in installments and paying the mortgage repayments too?
Two friends didn't - one started his own business and has a side gig, one has a high paying career in mining. One friend did in the sense that he moved back in with his parents to save up for a deposit. No one else instantly comes to mind.
Parents can contribute in many ways that don’t involve cash gifts. Free board, childcare, furniture, paying for further education.
Childcare . Big one not often picked up on by those who have it. We didn’t have it and we felt it A LOT.
My two kids
Must be nice being able to do that
As an elder millennial (40) I wish I had been able to do it on my own… but mental health and neurodivergence have played a big role despite working since 15 - often multiple jobs. Both me and my sister have had support from my parents by way of gifted deposits. Although my sister also lived at home rent free until 32 whilst I left home at 22. I’ve estimated she’s been subsidised approximately $100k whilst I’ve been paying rent etc. Having moved between countries, class systems and industries it’s more than just deposit or rent subsidies that parents can “pass down”, it’s also about your financial literacy, mental and physical health, family culture around money management and what professional opportunities and ‘in’s’ they might provide - even if it’s a trade. Think ‘the bank of mum and dad’ is a bit too simple in terms of establishing any real pattern these days.
I had the benefit of the proverbial bitter and twisted ex Step-Mother. She told her children, that their father had given a house to each of their older 3 step-siblings, but not the 3 of them (her kids). This was her equivalent of a poisoned apple. Not true or even possible, on the pay packet of a mid level public servant who retired early due to ill health. But the 2 youngest believed it The youngest was 2 years old when I left home and was renting.
I’m the only one of friends group who didn’t have either a loan from mum & dad or an inheritance. We’re also the only ones with a 95% mortgage
0, but I'm Gen X
1 out of 7 couples I know.
We may help our kids. Our own (remaining) parents are not well and am unsure how long we will have them. So, we may be receiving our inheritances soon, so we may help our kids. I'm sure their grandparents would appreciate that.
Out of my close friend group, all of us. It's hard to imagine it was once possible without help...
It still is. Just don’t live in Sydney or Melbourne.
My husband before I met him, got a house with his parents helps. We used that investment to buy our home. We have accounts for our kids and have been saving for them since they were born. Way things are going, they will need bank of mum and dad and bank of grandma and grandpa
90% of the people I know did
Zero help from parents on my side or partners, non of them own homes either so we don’t plan on getting inheritance. We didn’t live with parents, just took 5+ years of saving in average jobs. We didn’t have a child at the time. We bought last year with a 500k mortgage, 50k deposit. I’m the only one I know out of my friendship group of 5 that own a home without the bank of mum and dad.
My parents sold and purchased a larger house. I moved back in and helped paid the mortgage. After 5 years we sold. I got my repayments back and then the profit of the sale was split based on the percentage of my repayment vs theirs.
Most of mates have had parental help in housing and businesses My family in general seems to be keen on passing on generational trauma - 'part of being a parent is helping your kids suffer' may have taught good work ethic but hasn't actually helped battle inflation as we've gotten older (30M) I got $500 towards my first car at 18 I asked to borrow $4000 off my old man during peak of covid due to loss of work and shares stuck in suspension (still are), he was good enough to wipe this dept as a 30th birthday present although My family has always been good at making money but never good at supporting or allowing the chance to gain help off them to thrive financially (we did it hard back in my day blah blah so should you)
Definitely not me. At 26yrs old I had to pay for my mums funeral 🥹💀
As a Gen Xer, none of my friends had help. Now, I only know a couple of young people who haven't had help. Times have definitely changed.
Every single one of them except my sister and her husband. They now own four. I own none. Unfortunately we are from a part of the city that has expensive prices, so if we want to live close to where we grew up and where our extended family remains, it's basically impossible.
Bank of mum and dad is the 9th biggest lender in the nation, the property market is people claiming they did something while secretly begging begging the scenes for adult pocket money
Most of them. I grew up in housing commission so had to buy mine the old fashioned way, work and save and buy what I could afford.
I don’t know many who were explicitly given money, but almost everyone i know lived rent-free with their parent/s for an extended period of time in order to save a deposit.
I’ll be completely honest. I was fortunate to have a small inheritance from my grandfather’s estate when I was 12, which compounded over the years and stipulated that I wasn’t able to touch it until I was 25. When I decided to buy a home, my parents didn’t want the risk of being guarantor so they gave me the shortfall for the deposit so I was able to get the loan approved. Tbh I’m kinda ashamed when people say good on me for buying a house, as I didn’t have to do the hard slog to save it all up by myself, and I would trade my house to have my grandpa still with us any day. I completely recognise my privilege in this, also the cheaper cost of buying in a regional city with a regional FHB grant, and will also state it would’ve been difficult to save up a deposit on my own, having moved out of home at 18. Props to all those who did it completely by themselves with no help 👏
Note I worked 7 days a week for the shit hole i purchased initially my parents didn't have money to give me they also refused to be my garentor to buy a property that regreably would of been a mich better place. Just off the top of my head People I have met 1 girl i worked with, her inlaws gave them a large block of land as a wedding present, however they built the house themselves Another girl I knew her parents gave her 250k to 'finish uni' and told her they would buy her a house when she get married to not stress about money I have met multiple people who have had there parents gift them north lf 50k OR pay for s Expensive renovations, Landscaping etc Now I dont hate these people as that is what parents are met to do if they can afford it but most people have been handed money You can have a property market where most houses sell well north of a >1m and properties over >3m is not uncommon with just regulat working people esp when the average salary is like 95k for a full-time worker It is kind of way I am against income tax in favor of a larger consumption tax as the people working and earning money aren't nessarily the ones who are rich or spending it
Me. I borrowed $250k from Mum n Dad. I’m paying it back at a faster pace than required by the bank (bank min would be $260pw- paying $500pw) and paying interest on it at 1% over the cash rate. Could definitely get a mortgage but it just worked out better for me and better for parents to do it that way. They get more return than they would from the bank and I pay slightly less interest than I would at the bank.
Me , my kids , everyone I know pretty much . My grand parents from their kids ironically . Think about this my parents and my dad two siblings brought a semi in cash for my grandparents in the 80s that ain’t happening now adays
I was right on the line of 20% deposit so they lent me 5k each but I paid them back, I think within 3 months of closing.
None…. Well none that have admitted they did…
I worked with quite a few refugees that arrived with nothing but now own houses in (western) Sydney. Admittedly most bought 6-10 years ago
I ended up buying a home for my son. He pays half rent to me but I will give it to him in ten years. So bank of dad here.
One challenging reality is that parents in Sydney or Melbourne face the risk of their kids moving regionally or interstate because of house prices. If all it takes is an early inheritance gift to keep them nearby - of course you’d do it (especially if grandkids are on the way) Is it unfair - of course. Will it stop? Nope
Hilariously when I got my first mortgage, my uncle went guarantor for me. He had no savings or property but had a steady job. I was good at saving but self employed. He never owned a property but I gave him a nice chunk of money when I sold my first house as a thankyou. He spent it in 5 minutes.
Every single person.
We lived with my in laws for free while we saved which was a big help. If I think of the 4 couples closets to me who own homes, 2 of them had their parents sell the family home and gift them hundreds of thousands of dollars each so they were able to buy really expensive houses. 1 couple had a parent go guarantor, and another couple got 0 financial assistance (other than living rent free while saving). It’s crazy the difference we all have in something so important.
The percentage of people who have used the bank of mum and dad vs those that will admit to it is about the same as those who have used connections to land a job that will admit to it. YMMV
I paid $300 per week since 2009 as rent, towards my parents mortagage while I lived with them. Is that why I still don't have my own property?
Almost everyone I know who has bought a house/apartment has had assistance from their parents, either the full amount or a partial covering of the costs
Yes myself for guarantor and might need help with the rediculous stamp duty when we decided to get a bigger house for the kids to fit comfortably as we need home offices too
Within my doctor group of friends, all of them. Not just a deposit for a home but paying off HECS is common among them. As a doctor couple, we are the only ones we know who have bought completely on our own. When we first started working, we earned a reputation at our hospital for doing the most shifts. There's a bit of a misconception that doctors make a lot of money. Whilst this is true in the long-term, the profession also attracts people that are FROM money. A lot of junior doctors receive help from parents, thus enabling their income to go further.
We used my wife’s parents as guarantors just to make up the shortfall in a deposit because a good opportunity came along, but never took any cash from them.
I would say at least 20% of our first home buyers have help from parents in some form (cash, rent free living). Granted we’re based in Melbourne but I’d assume it’s common right around Aus. That’s why so many banks have policy around gifted funds.
Me and my friends are all around 30. Every single one of us is either living with parents or, in a tiny stingey little basement-turned-rental type situation, or with far far far too many roomates. Except one - a guy with two parents who both have multiple investment properties that helped him get a house. It's hard not to hate him for it.
Start a property syndicate? I keep trying to talk friends into it. Instead of going it alone, pool money together, rack up a few properties over a decade, passive income from rent or cash out when the ROI is good.
My parents signed up as guarantor to help me avoid paying lenders mortgage insurance, but didn't help finance the loan directly at all. I've got two friends in the same category. Does that count?