First home buyers in their 30s still need parents help: NAB

First home buyers in their 30s still need parents help: NAB
Jonathan ChancellorDecember 7, 2020

First home buyers are increasingly turning to their families for financial help, National Australia Bank analysis shows.

It found that 6.7% of its first home buyers are now using the NAB Family Guarantee product to get on the property market ladder – up from 4.8% in 2010.

Customers in the Northern Territory and Tasmania accessed the NAB Family Guarantee the most, with 14.3% and 12.1% respectively of first home buyers taking up the offer in 2015.

The NAB Family Guarantee allows customers to use money, placed in a term deposit account, to support a fellow family member to buy, while allowing their family members to earn interest in a term deposit on the money they provided as security. NAB informs customers about the risks associated with acting as a guarantor.

NAB's family guarantee product allows family member to limit their exposure to a proportion of the loan, rather than the whole loan.

Family members' exposure was often around 20% of the loan, the point at which banks no longer require mortgage insurance.

“Our figures show this product is increasing in popularity because it allows parents to gain from their support for their child’s home loan,” NAB executive general manager consumer lending, Angus Gilfillan said.

The bulk of customers using the NAB Family Guarantee so far in the 2015 financial year were aged 20-29 (73%), but there was also a large portion were aged 30-39 (21%).

“Our data shows some customers are in their 30s or 40s when they buy their first home, while at the other end of the spectrum we have also seen 3% of first home buyers using the NAB Family Guarantee this year in their teens,” he said.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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