It’s Official! There is now a simple mortgage product especially for parents who want to help their kids get on the property ladder. The difference is, it doesn’t involve risky re-mortgaging or bank guarantees.
How does it work?
Essentially parents become investors in the property. The parents decide how much to invest, over how many years, and the interest rate. Parents typically receive the bulk of the mortgage interest every month as a kind of “dividend.”
What are the benefits for parents?
- There’s no need to re-mortgage
- There is no risky bank guarantee
- There’s no risk to other savings
- Parents remain in full control – at any time they can waive or “forgive” the loan
- The contribution is formally and legally documented, and independently managed
- Parent can invest individually, via company or family trust entities
What are the benefits for the children buying their first home?
- You can still qualify for the First Home Owner Grant
- You are still eligible for any stamp duty concessions
- You have more purchasing power
- The loan rate is typically lower
- Both sets of parents can contribute / invest in your mortgage (you and partner’s)
- There aren’t any restrictions on the type of home you can buy
- The loan is independently managed and your parents’ contribution legally documented
Get in Touch
If you are interested in helping your children to purchase their home or if you think your parents would be interested in this innovative mortgage solution, drop me a line - 0466 392 892 or email me anytime.