News

Bank of Mum and Dad now fifth biggest lender in Australia

03 October 2017

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.

 

Latest

The Australian Prudential Regulation Authority has confirmed it is removing its 10 per cent benchmark on investor loan growth that it brought in in 2014.

Read more

Mortgage brokers are this week fighting back against Hayne royal commission criticism claiming they are a moderating influence on the lending sector and the dominance of major players.

Read more

Melbourne has topped the Housing Industry Association’s latest list of the top 20 building growth areas.

Read more

A new study has looked into how Labor’s property tax proposals would hit the country’s property markets and has found it would vary around the nation.

Read more