For many first home buyers, it is the deposit that is the biggest hurdle. The federal government’s low deposit schemes, which are designed to help those with less than 20 per cent deposit to get a mortgage, will add 50,000 more places for eligible home buyers this financial year.
During this financial year, 35,000 new places will be available in the First Home Guarantee; 10,000 places for the Regional First Home Buyer Guarantee and 5000 places for the Family Home Guarantee.
There are salary limits for the schemes as well as caps on purchase prices, which vary depending on the location of the property.
The bank of mum and dad can be another way for those struggling to get a start on the property market, at least for those lucky enough to have parents willing to help and in a financial position to do so.
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Many adult children would likely prefer part of their inheritance given to them early when it would be most useful to them.
A research paper released by the Productivity Commission in late 2021 said recipients of inheritances were well into middle age, close to their peak earning capacity and most of them were already home owners.
Sarah Megginson, personal finance expert at Finder, says early inheritance can help to drastically improve the lives of children, such as using the money for a deposit on a home or investing in education.
However, it is not a decision that should be made without some serious consideration of the parents’ future financial needs, she says.
A survey conducted of investors on behalf of investment platform Stake found that many of the parents among those surveyed have helped their children to buy a home.
However, some said helping their children had limited their ability to travel, or to save or invest, or had delayed their retirement.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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