Lucy Dean / Financial Review
What every parent considering gifting or lending cash to their kids for a home deposit must know.
Tim and Catherine are borrowing money from family to buy their first home. What they don’t realise is if Catherine’s parents loan them $100,000, it will cut their borrowing power from the banks by $270,000.
This is because the bank will factor in the loans from Catherine’s parents when assessing this hypothetical couple’s ability to repay.
