Parents pitching in: Just 1 in 10 received help from the bank of mum and dad
Just a small proportion of Aussie homeowners tapped into the bank of mum and dad when buying their first home, according to new research by Finder.
A Finder survey of 1,096 respondents – 584 of whom own a home – revealed just 1 in 10 (11%) – equivalent to 682,000 households – received financial assistance from their parents towards a deposit on their first home.
Those who received financial assistance were granted an average of $56,231 towards their deposit.
A third (35%) of first home buyers didn't receive an offer of help from the bank of mum and dad but this included 12% who still receive help from their parents in other ways.
The research found 1 in 10 (8%) first home buyers asked their parents for help but the request was denied, while a similar amount (9%) had their parents guarantee their loan.
A further 36% didn't want financial assistance from their parents towards a deposit.
Richard Whitten, home loans expert at Finder, said saving for a deposit is no small feat.
"Getting on the property ladder can feel like an impossible dream, but many battle to do so without the help from the bank of mum and dad.
"For many home buyers there is no bank of mum and dad. They're on their own.
"Over the course of the pandemic, saving for a house deposit became easier as many were able to stash away their cash during lockdown. However, the cost of living has forced Aussies to cut savings.
"Rising costs and skyrocketing interest rates will see plenty of Australians priced out of the market without financial assistance – a worry felt by thousands of house hunters across the country."
The average first home buyer deposit in Australia now tops almost $119,000 – more than the average full time salary of $94,000.
It would take the average first home buyer over 12 years to save up that amount of cash, taking into account potential interest earned in an average savings account with a rate of 2.7%.
Whitten urged prospective first home buyers to supercharge their savings.
"Look for ways to boost your capital.
"With some high interest savings accounts surpassing 5.5%, getting a decent earnings rate for your savings is becoming easier."
Whitten said every dollar counts when you're on the road to home ownership.
"There are plenty of schemes and incentives for first home buyers to take advantage of.
"Finder's Guide for First Home Buyers helps you through the home-buying process to alleviate some of the stress that comes with purchasing your first home.
"If you qualify for a first home owners grant, this can form part of your deposit.
"Getting your parents to go guarantor can be an option for some buyers if direct financial support is out of the question.
"With millions of first home buyers going it alone, they need every trick in the book to save up a home deposit faster."
|Did you receive any financial assistance from your parents when paying for a deposit on your first home?|
|No, I asked and they chose not to||8%|
|No, but they went guarantor||9%|
|No, they didn't offer but they help in other ways||12%|
|No, they didn't offer and they don't help me financially||23%|
|No, I didn't want their assistance||36%|
|Source: Finder survey of 584 respondents who have owned their own home, July 2023|
Start your journey to homeownership with the help of Finder's Guide for First Home Buyers.