Young buyers turn to the Bank of Mum and Dad

Gone are the days of paying off the family mortgage using one, or even two, incomes.

New research from shows a staggering number of young couples are needing parents to chip in to enter the property market.

The research shows Gen Ys – those born in the 80s to 00’s – need three incomes to afford the repayments.

Key findings:

  • 1 in 7 Gen Ys (under 35s) said they needed 3 incomes to afford repayments on their first home (double income plus another income i.e. parents
  • meeting-the-parentsAlmost half of 18-24 year old need help from mum and dad to buy a house
  • By comparison, half of Gen X respondents said they needed 2 incomes
  • Half of baby boomers surveyed said they paid for their mortgage with just 1 income.
  • 1 in 3 Gen Y’s are planning to buy their own home in the next five years, while 1 in 10 were planning on buying an investment property.

Gen X, born in the 60s to early 80s, needed two incomes to pay for their homes, while Baby Boomers paid of their homes on just one income.

Sally Tindall, money editor at, said more and more first home buyers were relying on their parents to get into the property market.

“A double income doesn’t cut it for a lot of young would-be homebuyers now.
House prices are on the rise, as is cost of living, so it’s really hard to save for a deposit,” she said.
“That’s why the bank of mum and dad has never been so popular.

It has a good reputation as a lender – with its long borrowing terms, flexible repayment options and sometimes with no interest attached.” research found that the biggest barrier to home-ownership was salary, with 68 per cent of Australians indicating

that’s where they fell short, followed by cost of living (59 per cent) and rising property prices (55 per cent).

“The cost of renting is a big hurdle too, with one in four people saying it made home-ownership out of reach,” she said.

“Interestingly, rent was a bigger barrier for high income earners, which suggests that some of them could be living beyond their means, but less of a concern for Gen Y, probably because many are choosing to live in their parents’ home for longer.

“While not all parents will be wealthy enough to contribute financially towards the deposit, many are helping out in other ways by going guarantor on the home loan and buying together as ‘co-borrowers’.”

For everyone else, there’s a long a road of debt ahead, with some anticipating a retirement saddled with debt, the research showed.

“A third of 18-24 year olds think they won’t be mortgage-free until age 55 or older, with half of those not expecting to be mortgage free until over 65,” said Tindall.

“Lower income earners expect to be hit hardest, with one in 10 not expecting to pay off their mortgage until 75 or older.” survey, conducted by Sweeney Research

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit

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