The “bank of mum and dad” has become the tenth biggest mortgage lender in Australia as first-time buyers turn to their parents for help.
Data crunched by research firm Digital Finance Analytics (DFA) shows parents are lending even more than the likes of AMP Capital and HSBC.
When DFA first started collecting data at the beginning of 2010, only 3% of first-home buyers were seeking help from their parents. At the time, the average amount borrowed from parents was $23,000.
Its latest analysis for the September 2022 Quarter shows that 46% of first-home buyers are getting help to buy from their parents with the average level of financial assistance now more than four times higher at $107,000.
This has dropped in the past 12 months, as it was as high as 62% ($118,923) in the December 2021 Quarter.
According to DFA analysis, 28.6% of first-home buyers who didn’t get parental assistance are experiencing financial stress.
The report says as interest rates rise, many parents are now facing their own financial difficulties and may not be able to help their children with their mortgages as readily as they could in the past.
