The much-loved Bank of Mum and Dad is now the fifth-biggest lender on mortgages in Australia and it’s closing in on the big four banks.
Financial comparison website Mozo has surveyed 1000 people and say the figures from that show The Bank of Mum and Dad has lent around $65 billion to young home buyers.
The survey figures mean around 30 per cent of parents help their children to buy a home. That’s more than one million families.
In good news for many of the young borrowers, around two-thirds of those mum and dad lenders don’t expect to ever be repaid.
One big advantage The Bank of Mum and Dad has over the likes of poor old Westpac and Commonwealth is they can assist by letting their children live with them rent-free while they save a deposit.
Parents are also helping by just paying directly towards that deposit, and the average amount parents are chipping in sits at around $42,000.
A much smaller percentage of parents are also helping out with repayments once the property is secured.
The Bank of Mum and Dad has been profiting greatly from the ongoing issue of housing affordability in Melbourne and Sydney in particular, with plenty of young aspiring homebuyers having little other option, and in Melbourne the bank has the dubious honour of lending around $63,000 in total and on average to their children for their own home.