News broke earlier in the week that revealed New Zealand has a new a bank on the scene! A bank you may not have heard of before and one bigger than Kiwibank and TSB combined –
Yep, it’s ‘The Bank of Mum & Dad’, or ‘BoMD’ as it’s being referred to.
Good old Kiwi parents across the nation have dished out funds in excess of $22 billion dollars to their kids to help them into buying homes. Of this, three out of five parents didn’t even want their money back!
It’s no surprise really, given the way house prices have increased over the last couple of years. It’s come to a point where simply ‘having a good job and saving money’ can often no longer be enough to purchase a first home – and that’s where BoMD comes in.
Baby Boomer & Gen X parents across NZ have enjoyed spectacular capital gains on property they purchased over the last few decades and are using these gains to help their kids. As mortgage brokers – we see this day in, day out.
From our perspective, there is absolutely nothing wrong with parents helping out and it really can be a win-win situation for kids and parents alike, as long as it’s done properly.
Mum & Dad – To put your mind at ease, there are options to those two out of five parents who want their money back at some stage too!
In the videos below Claire explains how this can work for the children and in a separate video, for Mum and/or Dad. Both parties need to go into the arrangement with eyes wide open to understand all the options and we're here to provide you with those options.