A worrying new report names the so-called ‘Bank of Mum and Dad’ as Australia’s 5th largest lender. This ‘Bank’ – Aussie parents – have collectively lent their sons and daughters more than a whopping $65 billion dollars. Almost a third of parents now help their kids buy a home. The average amount ‘lent’ is $64,000. Why the scare quotes around ‘lent’? Because in two-thirds of cases, Mum and Dad don’t expect to be repaid. (In my book, that’s called a gift, not a loan).
But should you rely on the Bank of Mum and Dad? And, Mums and Dads – should you lend to your kids?
This post – a bumper issue that is the first to tackle two questions – is not only for those considering lending money within families, but also for those who have or will buy a home without family support.
Continue reading “Should I rely on the Bank of Mum and Dad? / Should I lend money to my kids?”