How Mum and Dad’s Equity Can Help First-Home Buyers
For many young Aussies, getting into the property market feels like a never-ending uphill battle, especially in high-demand areas like the Sunshine Coast. Rising prices and cost-of-living pressures mean saving a deposit can take years. But there are ways to get ahead sooner.
How Does Using Equity Work?
Parents who’ve built up significant equity in their property can act as guarantors, allowing their children to borrow up to 100% of the purchase price plus costs. Instead of needing a deposit, part of the loan is secured against mum and dad’s home.
If the children have managed to save something, that money can be redirected into renovations or improvements, increasing the property’s value and reducing the timeframe for releasing parents as guarantors.
What About Government Support?
Alongside parental equity, the First Home Guarantee Scheme offers a similar setup. Buyers need just 5% genuine savings, while the government steps in to cover the remaining 15%. This avoids the need for lenders’ mortgage insurance (LMI), which on Sunshine Coast property prices could easily exceed $30,000.
How Simple Is the Process?
Applying for a home loan isn’t the paperwork nightmare it used to be. Paul explains that BrokerCo has systems in place to take the heavy lifting out of the process. All buyers really need to get started is:
- Basic ID
- A couple of recent payslips
From there, BrokerCo can quickly assess whether it’s viable and provide a plan. And if it’s not quite the right time, you’ll walk away with a clear roadmap, whether that means saving a little longer, tidying up your credit, or exploring options with mum and dad.
Parents’ equity can be a real leg-up into the Aussie property market. In many cases, buyers might not even need a deposit if part of the loan is secured against mum and dad’s home. Savings that would normally go towards a deposit can instead be put into renos, helping to boost equity growth faster. On top of that, government schemes can step in to fill the gap while avoiding expensive Lenders Mortgage Insurance (LMI). Best of all, the loan process is often more straightforward than most people realise, with advice tailored to your own situation.
Ready to Explore Your Options?
Whether it’s using mum and dad’s equity, tapping into a government scheme, or simply mapping out a savings plan, BrokerCo is here to guide you every step of the way.