Buying guide
5 ways your parents can help you buy a home
Property ladder feeling out of reach? Here's how your parents might be able to help.
4 July 2023
AI summary
The Bank of Mum and Dad is a major lender for Kiwi first-home buyers. Common ways parents can help include gifting a deposit, providing a formal loan, acting as a guarantor, or co-owning the property.
It is crucial to seek independent legal and financial advice to protect everyone involved. Formal documents like a Deed of Acknowledgement of Debt or a Property Sharing Agreement are essential, especially to clarify ownership if relationships change. Always consider the financial impact on your parents' retirement.
Here’s what you’ll learn:
You should seek reliable legal advice before committing anything.
1. Parents use equity in the family home
2. Parents make a loan to the children
Parents may use the family home as security against a loan.
3. Parents act as guarantor on the home loan
4. Parents offset part of a child’s mortgage
5. Co-owning with parents
Other things parents can do to help you on your way
In all cases, it is important to ask the tough questions up front.
Key questions for Mum and Dad before they take the next step
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