An Illawarra first homebuyer admits she wouldn’t have been able to achieve her goal without the help of the ‘bank of Mum and Dad’.
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A recent Digital Finance Analytics survey found that the ‘bank of Mum and Dad’ is now one of the most significant lenders in Australia outside of the major banks, with at least $16 billion in lending outstanding.
With capital city home prices in Australia having increased significantly since 2012, it has become more common for parents to assist their children with a home deposit, or through paying the stamp duty costs on their behalf.
Hair stylist Helen Billingham, 32, previously of Sydney, recently bought her first property.
Her parents went guarantor for the loan for the two-bedroom apartment in North Wollongong.
“They helped me with the deposit; I got my loan, but they paid the deposit for me until the loan came through when it all settled,” she said.
“So that was another big help as well, because I wouldn’t have been able to pull that deposit out of thin air.”
She also returned to living with her parents in Sydney for about eight months in order to save money and help with expenses such as paying off her car.
Ms Billingham said she “would not have been able to do it” if not for her parents’ assistance.
“It’s just me, so it’s only my income – that made it even more difficult, having only one person to pay the mortgage,” she said.
“At the beginning of the year I didn’t even think it would be possible, so I went with my parents to a mortgage broker.
“Then I worked out that I could actually do it, but obviously not in Sydney as it’s too expensive.”
Ms Billingham said it took “quite a few months, a lot of setbacks, a lot of offers that didn’t get accepted” before she secured a place.
She said the prospect of saving money to buy while having other life aspirations could be daunting.
“I don’t like the super fine things in life, but I like to have fun, travel and see the world,” she said.
“There were a few times I thought, ‘I’m not sure I can actually go ahead and do this’, because it’s such a big commitment.
“But knowing that my parents are behind me, and sat down and worked it out – dotted the i’s and crossed the t’s, it made it a little easier.
“But I wouldn’t have been able to do it by myself, absolutely not, without my parents’ help.”
While she was in a good position, Ms Billingham said she feared many of her friends wouldn’t be able to get out of the renting rut.
“They won’t be able to save enough money to buy somewhere,” she said.