Borrow
Can you guess Australia’s 5th-largest lender?
New research has revealed a surprising source of loans is trailing only the big four banks when it comes to property assistance and mortgages in Australia — and it’s not a financial institution.
Can you guess Australia’s 5th-largest lender?
New research has revealed a surprising source of loans is trailing only the big four banks when it comes to property assistance and mortgages in Australia — and it’s not a financial institution.
Comparison site Mozo has revealed that the “bank of mum and dad” is now Australia’s fifth-biggest lender, having lent $92 billion in property assistance to children in a bid to help them on to the property ladder in the past two years alone.
It’s a 41 per cent increase to the total amounts lent by parents compared to last time the survey was conducted in 2018.
The research even revealed that almost three in five parents — or 59 per cent — don’t actually expect their kids to repay them for the favour.
Mozo found that 1.2 million parents across the country have been seen to provide financial assistance to their kids for the purpose of property purchases since the last survey.
The average mum and dad is offering their kids $73,522 for the pursual of property, it was revealed.
The comparison site also indicated parents are making some huge sacrifices to act in such a capacity.
Nearly 65 per cent of parents are dipping into their own savings to provide funds to their children, while almost half of mums and dads have indicated they are cutting expenses or delaying retirement in their bid to help their kids move on to the property ladder.
A further 16 per cent revealed they had pulled money from their own home equity to help out.
Mozo director Kirsty Lamont has highlighted that the move of the bank of mum and dad into fifth place reflects Australia’s property market being “incredibly challenging for younger generations to break into”.
She noted property prices had surged by 395 per cent in the last 25 years, and for this reason, “the bank of mum and dad has become an essential player in our nation’s housing market”.
“At present, the cost of buying a property is 7.2 times the annual income of a typical household, whereas 25 years ago it was 1.6 times the annual household income,” Ms Lamont said.
And with loan contributions having grown by 41 per cent in the last two years alone, “the bank of mum and dad will not be closing shop anytime soon”.
About the author
About the author
Loans
Consumer groups slam axing of safe lending laws
One hundred and twenty-five organisations have banded together to oppose the federal government’s proposed relaxation of responsible lending laws, arguing it will hurt consumers and the broader e...Read more
Loans
‘Most Australians are through the worst’ as mortgage repayments resume
In a positive sign for the Australian economy, nearly 7 in 10 Australians who paused payments due to the COVID-19 pandemic have resumed repaying their mortgages, new figures have shown. ...Read more
Loans
Non-majors announce rate cuts
A number of non-major lenders have announced that they will pass on the full RBA rate cut to all existing variable rate home loan borrowers. ...Read more
Loans
Big 4 cut interest rates
Westpac, CBA, NAB and ANZ have all reduced their fixed rate home loans and some business loans following the Reserve Bank’s reduction of the official cash rate. ...Read more
Loans
What the RBA’s rate cut means for you
The RBA has slashed the official rate cut to a new record low of 0.10 per cent, but what does that mean for you? ...Read more
Loans
Banks slash rates for new customers – but will the RBA follow?
Lenders are continuing to price in a rate reduction from the Reserve Bank, according to new research. ...Read more
Loans
Are Australian mortgages held together by government support?
The response by the banks and the government to the COVID-19 pandemic has seen mortgage stress fall to a near record low, but dangers remain when support is withdrawn, consumer research has found. ...Read more
Loans
Open for business: Banks continue to lend to small businesses
Credit is continuing to flow to small and medium-sized businesses, with $41 billion in new loans approved since February. ...Read more
Loans
Consumer groups slam axing of safe lending laws
One hundred and twenty-five organisations have banded together to oppose the federal government’s proposed relaxation of responsible lending laws, arguing it will hurt consumers and the broader e...Read more
Loans
‘Most Australians are through the worst’ as mortgage repayments resume
In a positive sign for the Australian economy, nearly 7 in 10 Australians who paused payments due to the COVID-19 pandemic have resumed repaying their mortgages, new figures have shown. ...Read more
Loans
Non-majors announce rate cuts
A number of non-major lenders have announced that they will pass on the full RBA rate cut to all existing variable rate home loan borrowers. ...Read more
Loans
Big 4 cut interest rates
Westpac, CBA, NAB and ANZ have all reduced their fixed rate home loans and some business loans following the Reserve Bank’s reduction of the official cash rate. ...Read more
Loans
What the RBA’s rate cut means for you
The RBA has slashed the official rate cut to a new record low of 0.10 per cent, but what does that mean for you? ...Read more
Loans
Banks slash rates for new customers – but will the RBA follow?
Lenders are continuing to price in a rate reduction from the Reserve Bank, according to new research. ...Read more
Loans
Are Australian mortgages held together by government support?
The response by the banks and the government to the COVID-19 pandemic has seen mortgage stress fall to a near record low, but dangers remain when support is withdrawn, consumer research has found. ...Read more
Loans
Open for business: Banks continue to lend to small businesses
Credit is continuing to flow to small and medium-sized businesses, with $41 billion in new loans approved since February. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
