Blog-article | Mortgage Broker Melbourne West

Owning an investment property can be a great way to build long-term wealth, but only if you manage the tax side effectively.

Whether you're starting out or expanding a portfolio, understanding how to manage your tax is essential.

Here are seven things every property investor needs to know.

1. Keep Meticulous Records from Day One

Good record-keeping is the foundation of good tax planning. From the moment you purchase a property, make sure to document everything, including contracts, legal fees, loan statements, agent fees, repair invoices, depreciation schedules, and evidence of tenant communications. Having these records means you won’t miss out on deductions and makes capital gains tax (CGT) calculations far easier when you eventually sell.

2. Claim All Eligible Deductions

Many property investors miss out on deductions simply because they don’t understand what’s claimable. Advertising for tenants, property management fees, council rates, loan interest, insurance, repairs, maintenance, and even depreciation on fixtures can all be deductible. Just ensure your property is genuinely available for rent, and adjust for any private use or vacancy periods.

3. Report Every Dollar of Rental Income

The ATO is watching, and that includes rent from Airbnb, Stayz, subletting, or even retained bond money. You must declare all income received during the financial year, even if it comes through an agent or platform. Failing to report can lead to audits and penalties.

4. Understand PAYG Instalments and Tax Planning

If your rental property generates significant income, you may need to make Pay As You Go (PAYG) instalments. Planning ahead can prevent surprise tax bills and smooth out your cash flow. Speak with your accountant to determine whether you need to prepay expenses, defer income, or make voluntary contributions.

5. Know Your CGT Obligations

When the time comes to sell, capital gains tax can eat into your profits. The taxable gain is calculated as the difference between your property's sale price and its cost base (including purchase price, legal fees, stamp duty, and improvements). If you’ve owned the property for more than 12 months, you may be eligible for a 50% CGT discount as an Australian resident. Just be aware that private use, discounts, or transfers below market value can impact your calculation.

6. Maximise Depreciation with a Professional Schedule

Property investors can claim depreciation on both the building structure and eligible fixtures. Engaging a quantity surveyor to prepare a tax depreciation schedule can help maximise this deduction, particularly for newer properties or those with significant renovations. These deductions can amount to thousands each year.

7. Get Expert Advice

Tax legislation changes often, and no two properties (or investors) are alike. A tax-smart investor knows when to call in the professionals. A registered tax agent or accountant with experience in property can help structure your ownership, forecast liabilities, and identify deductions you may have overlooked.

Personal loans are a flexible and widely used financial tool in Australia, offering fast access to funds for everything from large purchases to debt consolidation. But before you apply, it's important to understand the full picture.

Here are the key advantages and disadvantages to consider before committing to a personal loan.

Build Your Credit Score

A personal loan can help improve your credit score if managed properly. Regular, on-time repayments show lenders you can handle debt responsibly. Most lenders report your repayment behaviour to credit bureaus, so positive activity can boost your creditworthiness. But it works both ways with missed payments or defaults potentially damaging your score and limiting future borrowing power.

Finance Large Purchases with Fixed Terms

Personal loans provide a lump sum upfront, ideal for major expenses like a home renovation, car purchase, or wedding. The fixed interest rate and repayment term offer predictability and easier budgeting. Unlike credit cards with fluctuating rates and revolving balances, personal loans offer a structured path to payoff, often with lower interest.

Consolidate Debts into One Simple Payment

If you’re juggling multiple debts, like credit cards, car loans, or store finance, consolidating them into a single personal loan can simplify your repayments and potentially reduce your interest costs. Some lenders even offer to pay off your existing debts directly. This approach can help reduce stress and support faster debt repayment.

Enjoy Competitive Rates and Flexible Use

Personal loans typically offer more favourable interest rates than credit cards or payday lenders. Rates can be lower for borrowers with strong credit histories, and the funds can be used for almost any purpose, from medical bills to business expenses. Plus, because they're unsecured, you don't need to risk your home or car as collateral.

Access Funds Quickly

The application process for personal loans is often quick, with funds available within one to two business days. Since most personal loans are unsecured, your assets aren't tied to the loan, giving you peace of mind. This makes them ideal for urgent expenses or short-term needs where timing is key.

Understand the Risks and Costs

While personal loans have many benefits, there are risks to keep in mind. If you miss repayments, you could face fees, a lower credit score, and potential legal action. Interest costs can also add up over time, especially for longer loan terms. It's crucial to compare offers, understand the total cost of borrowing, and choose a repayment plan that fits your budget.

Choose the Right Loan for Your Situation

There are many types of personal loans on the market, so take the time to find one that fits your needs. Consider loan amount, term length, interest rate, fees, and flexibility.

Speaking to a finance broker is the best way to compare your options.

Buying your first home is an exciting milestone, but auctions can be one of the most nerve-wracking parts of the journey.

With fast bidding, no cooling-off period, and legal obligations the moment the hammer falls, auctions are not for the faint-hearted. But with the right preparation and strategy, you can step into your first auction with confidence.

Here’s how to make it work for you.

1. Understand the Market Before You Bid

Start by doing your research. Attend a few local auctions as a spectator to understand how the process works and familiarise yourself with the language and pace. Look at recent sales of similar homes in your desired suburb and use this to determine fair value. Your mortgage broker can also provide property reports that help guide your expectations.

2. Get Pre-Approved and Know Your Limits

Before you raise your hand, speak to a mortgage broker and get your loan pre-approved. You’ll need to have a deposit ready (usually 10%) and understand exactly what you can afford to spend. This ensures you don’t bid above your means and gives you the confidence to act quickly when the bidding heats up.

3. Conduct Thorough Inspections

Unlike private sales, auction purchases have no cooling-off period, so it’s crucial to do your due diligence before auction day. Arrange a building and pest inspection and have your solicitor review the contract. You need to know exactly what you’re buying and what your legal obligations will be.

4. Set Your Budget and Stick to It

Auctions are emotional environments, and it’s easy to get caught up in the excitement. Decide on your maximum bid ahead of time and don’t go over it. Walking away is better than committing to a loan you can’t comfortably repay or won’t get approved for.

5. Know the Auction Rules

Familiarise yourself with auction rules and terminology. Understand how vendor bids work, and clarify all sale terms before auction day. Your solicitor or conveyancer can walk you through the fine print to ensure there are no surprises.

6. Arrive Early and Register to Bid

Get to the auction at least 30 minutes early. This gives you time to register, ask final questions, and observe the crowd. It also helps you get comfortable with the setting and gives you an early read on the competition.

7. Start Strong and Bid Confidently

Confidence counts at auction. Consider making a strong opening bid to signal intent. Bid clearly and decisively to stay in control of the pace. Don’t be afraid to pause when needed, but avoid showing uncertainty, it can encourage other bidders.

8. Use Strategic Bidding Tactics

Try bidding in unusual increments to throw off other bidders (e.g., $505,000 instead of $500,000). Respond quickly to keep momentum and show strength. If bidding slows, take your time, it might give you valuable insight into who’s nearing their limit.

9. Know When to Walk Away

If bidding goes beyond your budget, hold your ground. There will always be other opportunities. Sticking to your limit ensures you don’t overstretch financially and that peace of mind is worth more than winning any auction.

10. Be Ready to Sign if You Win

If you're the successful bidder, be prepared to sign contracts and pay the deposit immediately. There’s no backing out once the hammer falls, so ensure you’re fully committed and financially ready.

As property prices hit record highs across a number of cities, it’s no surprise that new home loan balances are also nudging towards fresh peaks. Today we’ll reveal what the ‘average’ new home loan is in your state, and provide you with some handy tips to help bring down your balance sooner.

High interest rates and a cost of living crunch haven’t stopped home values rising 8% nationally over the last 12 months.

According to CoreLogic that’s added an extra $59,000 to the average Australian home’s value.

It’s great news for home owners, but not so good for buyers, who may have to take out a bigger loan to fund a property purchase.

On the plus side, not everyone is having to upsize their home loan.

In some cities, new mortgage sizes are staying pretty still or becoming slightly smaller.

What’s the average in your state?

Across Australia the ‘average’ new mortgage is at a record high of $626,055 as of May 2024, according to the Australian Bureau of Statistics. That’s up from $584,607 just 12 months earlier in May 2023.

That means you’d need to be able to make mortgage repayments of about $3,875 per month (assuming that you take out a 30-year principal and interest home loan at 6.3%).

However, ABS data shows plenty of variation in new loan sizes in different states and territories.

Here’s what’s happening across the country:

NSW – the average new home loan size is currently $767,584, up from $720,029 in May 2023.

VIC – average new home loan is $601,891, slightly up from $598,949 in May 2023 but well below the peak of $651,364 in January 2022.

QLD – the sunshine state’s average new home loan size is $586,627, a solid increase on the May 2023 average of $521,609.

SA – average new home loan of $541,775, a big jump on the May 2023 average of $467,438.

WA – average new home loan of $538,860, up from $472,080 in May 2023.

TAS – the Tassie market has seen very little movement in new loan sizes. The current average is $462,324, just a few thousand dollars shy of the $465,313 average in May 2023.

ACT – the average new home loan across Canberra is $614,242, up from $589,130 in May 2023.

NT – in the Top End, the average new home loan has increased slightly, currently sitting at $437,427 compared to $424,873 in May 2023.

How to potentially whittle away your home loan sooner

No matter where in Australia you are buying a home, managing a home loan can be stressful at a time when interest rates are high.

So, it’s important to look for ways to help ease the pressure.

Choosing an offset home loan, for example, can let you put spare cash to work by helping to lower your monthly interest charges.

It can also allow you to build up a savings buffer while also reducing the overall interest you pay on the loan, and thus, bring the balance down quicker.

If you are unlikely to have substantial savings, looking for a loan that lets you make small, extra repayments at no additional cost can be a way to pay down the loan sooner, and save on interest costs.

Even something as simple as switching from monthly to fortnightly loan repayments could deliver savings on your interest repayments over the course of the loan.

Paying half the monthly amount every fortnight can mean paying the equivalent of an extra month’s repayments each year, helping you forge ahead with the loan without too big an impact on your household budget.

What matters is that you speak to us about a mortgage that suits your unique needs. One that gives you the benefits of the loan features you need, plus a competitive interest rate.

So if you’ve got your eye on a potential new home – or just want to find out your borrowing capacity so you can start searching – get in touch with us today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The new financial year has kicked off with a bang for first home buyers! A whopping 45,000 more places have opened up for them under the Home Guarantee Scheme, as well as 5,000 more spots for single parents. Here’s how it could help you buy a home sooner.

Home ownership has long been the great Australian dream, but high property prices are making it tough to save a 20% deposit for many young families.

That’s where the federal government’s Home Guarantee Scheme (HGS) comes in.

It gives first home buyers a leg up into the property market even if they have just a 5% deposit, and it’s proving to be very popular.

In fact, it’s helped more than 160,000 Australians buy or build their own home since the scheme launched four years ago.

Places in the HGS are capped each year, but the good news is that an extra 50,000 spots have just been announced for the 2024-25 financial year.

Not sure what the scheme is about?

Let’s take a closer look at what’s involved by answering a few FAQs.

What is the Home Guarantee Scheme?

The HGS helps first home buyers and single parents buy a place of their own even when they have a small deposit.

Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance, which can be a big saving on upfront costs.

In fact, not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

Who does the scheme help?

The HGS covers three separate programs, each with a different type of home buyer in mind.

The First Home Guarantee helps eligible first home buyers get into the market with as little as a 5% deposit. From 1 July 2024, an extra 35,000 places became available.

The Regional First Home Buyer Guarantee is dedicated to helping first home buyers who live in regional areas buy a home with just a 5% deposit. An extra 10,000 places have opened up for the 2024-25 financial year.

The Family Home Guarantee supports eligible single parents to buy a home with as little as a 2% deposit. This will help up to 5,000 families this financial year.

Am I eligible for the Home Guarantee Scheme?

You’ll need to tick a few boxes to be eligible for the HGS.

In particular, there are limits around the maximum purchase price for a home under the scheme. The upper limits vary between cities and across regional areas from state to state, and are adjusted each financial year.

One way to find out if you’re eligible is to call us and we can walk you through the various requirements.

Do all banks support the Home Guarantee Scheme?

No. Lenders choose to be part of the HGS, and while there is a reasonably wide choice of banks to pick from, not all lenders have signed up.

The Real Estate Institute of Australia says the “best way to see if you can qualify for the scheme and seek pre-approval is to speak with a mortgage broker”.

To date, mortgage brokers have secured up to 80% of the HGS placements, and we can guide you through the application process, answer any questions you may have about buying a first home, and recommend a home loan option suited to your needs from the lenders that are part of the scheme.

Call us today to find out more about buying with a 5% deposit – and zero lenders mortgage insurance. You could be in your own home a lot sooner than you expected!

Property prices are expected to keep climbing higher through to mid-2025 – though not everywhere, according to a new report. We reveal where prices are tipped to go up, and where prices are expected to fall.

What a crazy financial year it’s been for property prices.

Despite a cost of living crunch and high interest rates, home values Australia-wide have soared 8.3% over the past 12 months, according to CoreLogic.

Will prices keep heading north? Or can we expect the market to cool at some stage?

These are key questions for home buyers who may be weighing up whether now is the right time to buy.

To get some answers, we turned to Domain’s latest forecast report, which sets out expected property price movements over the next 12 months.

The big picture: prices set to keep rising

According to Domain, several factors are set to push Australian home prices higher over the next year.

On one hand, we’re seeing a tight supply of new homes being built, combined with lower than usual numbers of homes listed for sale.

On the other side of the ledger, strong buyer demand is being fuelled by a growth in migration.

As Domain puts it, the “push-pull between affordability and availability” will be the factor that shapes Australia’s property market between now and June 2025.

Price growth is expected to differ between cities

That’s not to say home prices across Australia will move in the same direction and at the same pace.

Let’s take a quick tour around the nation to see what Domain believes lies in store for home buyers (and apologies to Hobart and Darwin residents – neither city was covered in the released report).

Brisbane

Brisbane’s property market has notched up an impressive 16.3% price growth over the past year. And Domain says there’s more growth to come.

With a forecast for 6-8% price growth, Brisbane’s median house price could hit a record high of up to $998,500 by mid-2025. Apartment values are expected to increase by 4-6%.

Sydney

If Domain’s prediction of 6-8% price growth proves accurate, Sydney’s median house price will hit a new record high of up to $1.76 million by this time next year.

Apartment prices (median) are also expected to reach a new record of up to $855,000 based on forecast price growth of 4-6%.

Melbourne

Melbourne’s housing market is expected to remain a little cooler, with growth between 0-2% expected – leaving median house prices between $1.03 million and $1.05 million. Unit prices are expected to do better, potentially rising by up to 4%.

Regional Victoria is the only market where Domain expects house prices to cool, with falls of 0-3% expected by mid-2025.

Adelaide

Adelaide could be on track to become a million-dollar city if Domain’s forecast of 7-8% price growth pans out. It could see Adelaide’s median house price hit a record high of up to $984,000 by June 2025.

Unit prices are anticipated to grow by up to 6%, helping the city’s median apartment price push through the $500,000 barrier.

Perth

There’s no denying Perth has had a bumper year, with a 22% jump in home prices over the past 12 months. And according to Domain there’s plenty of gas left in the tank.

With price growth of 8-10% possible over the year ahead, Perth could notch up a record-high median house price of between $840,000 and $856,000 by this time next year. In the unit market, prices are expected to jump 4-5%.

Canberra

Canberrans can expect mild house price growth, with values forecast to climb by up to 4%.

Unit prices in the nation’s capital are expected to increase by 1-4%.

What to weigh up

Domain’s forecasts are just that – predictions, not facts.

Along with factors that could push prices higher, the property listing site also cautions that a tighter jobs market and stagnating incomes could put downward pressure on prices.

Long story short: the right time to buy is when you feel ready to get into the market.

We can’t say for sure how property prices will move.

But we can provide clear answers on your borrowing power, help you understand if you’re in a position to land home approval, and help you find a home loan that’s right for your needs.

Put the party pies on ice and postpone those rate-cut celebrations for a while yet. The much-touted rate cuts we’ve been waiting for may not arrive until 2025. Here’s why rates could be staying higher for longer, and how to take action yourself.

June saw the Reserve Bank of Australia (RBA) keep the cash rate on ice – yet again.

Rates haven’t budged since November last year, and with the RBA not due to make another rate call until August, interest rates will remain in a holding pattern for at least two more months.

For home owners struggling to manage their home loan at current interest rates, it begs the question: ‘what happened to all the talk about rate cuts in 2024?’

Here’s what’s happening.

One reason why rates aren’t moving

Just a few months ago, some of our biggest banks were predicting interest rates would start to slide sooner rather than later.

The Commonwealth Bank and Westpac, for instance, expected rate cuts as early as September.

That’s now looking increasingly unlikely.

The reason lies with inflation.

The RBA is intent on getting inflation down to 2-3%.

Unfortunately, inflation is not playing along.

It’s currently sitting at 3.6%. So close, but not quite there.

When are rates likely to fall?

The RBA expects it could be “some time yet” before inflation is happily nestled in that 2-3% range – the point at which long-awaited rate cuts may start to kick in.

It’s not much of a date for home owners to work towards, though the big banks have a few time frames of their own.

Westpac and NAB now both see rates heading south from December. And while CommBank recently stated it expected rates to fall in November, there are signs it’s losing hope for a 2024 rate cut.

“Given the challenging underlying inflation backdrop, as well as a labour market that is loosening more gradually than expected, the runway is shortening between now and November,” CBA’s head of Australian economics, Gareth Aird, said.

“The risk to our call is increasingly moving towards a later day for an easing cycle.”

Meanwhile, ANZ doesn’t expect a rate cut before 2025. Ditto Citi economists and a growing number of other experts.

Long story short, even if we do get a December 2024 RBA rate cut, it’s probably fair to say we won’t see those cuts flow through to home loans until early next year.

And a note of caution: the RBA mentioned in its June statement that it is “not ruling anything in or out”.

It’s a grim reminder that a rate cut is not guaranteed before another rate hike.

This is why it’s so important to take action of your own.

How to manage higher rates

Revisiting your household budget, identifying areas where you can cut back, and tucking spare cash into an offset account to save on loan interest are all steps worth considering.

And don’t forget, tax cuts for 13.6 million Australians kick in from 1 July.

That could provide extra cash each pay day to help pay off your home loan.

It’s also a good idea to speak to us for a home loan review.

We can let you know if you still have the loan that’s right for your needs, or if you could save by switching – without having to wait for RBA rate cuts.

Better still, rising national property values may mean you could be in a great position to refinance.

Talk to us today for more tips on managing your home loan repayments and possibly trimming your loan rate. It may mean the party pies can come out sooner!

Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

The classic tune ‘Home among the gum trees’ is fast becoming a lifestyle anthem for a growing number of Aussies.

A surging number of city-slickers are heading to the bush or bay, new Commonwealth Bank research shows.

In fact, metro to regional relocations are now 20% higher than pre-Covid.

It goes to show that regional towns and cities have a lot going for them.

So what’s the appeal?

Along with a laidback lifestyle and the chance to see Skippy on your way to work, rather than countless sets of traffic lights, a key drawcard of regional living is more affordable housing.

Where are people moving?

The Sunshine Coast in South East Queensland is currently the nation’s most popular destination for Australian movers, securing a 16% share of net internal migration over the past 12 months.

Other popular areas outside our nation’s capital cities include the Gold Coast, Wollongong, Newcastle, Lake Macquarie, Moorabool, Geelong, the Alexandrina region, the Fraser Coast and Launceston.

Western Australia is also becoming an increasingly attractive destination with Busselton, Capel, Greater Geraldton, Northam and Albany all making their way onto various hotspot lists this quarter.

Regional home values vs city prices

Across Australia’s capital cities, the median home value is about $864,780, according to CoreLogic.

By comparison, the median value across regional markets is $626,888.

That’s a whopping $237,892 difference.

The price gap can be far bigger depending on where you’re moving from and moving to.

In Sydney, for instance, the median house value is $1,441,957. Head to regional NSW, and you could pay closer to $760,000 for a house – a saving of around $680,000!

Regional living can help cut loan repayments

Buying a more affordable home can have other flow-on benefits, such as a lower stamp duty bill.

It can also have a huge impact on home loan repayments.

For example, let’s use the above figures and pretend you’re deciding between purchasing an $864,780 capital city home and a $626,888 regional area home.

To keep things simple, let’s say you’ve saved up $173,000 for a 20% deposit on the $864,780 home – and you’ve also got extra money set aside to cover any stamp duty expenses or other fees (the exact amount would vary state to state).

Let’s also assume a home loan rate of 6.4%, which the Reserve Bank of Australia says is about the current average principal and interest variable rate, and a 30-year loan term.

On this basis, the initial mortgage for the city home would be about $692,000 and the monthly mortgage repayments on the city home would come to around $4,329 each each month.

For the regional property, your initial mortgage would be about $454,000 (assuming you put the full $173,000 towards the deposit) with monthly repayments in the order of $2,840.

That’s a monthly saving of $1,489 by moving to a regional area – extra money to spend on your home, yourself or your lifestyle.

What about capital growth?

No one can say with certainty how property values will perform in the future.

What we can do however is look at how house prices have performed across regional areas in recent years.

CoreLogic says values in regional areas have jumped 51.1% ($212,000) nationally since March 2020, compared to an average of 31.5% ($207,000) across our state capitals.

So in terms of dollar values, the capital gains across both markets have been fairly similar in recent years.

Ready for your home among the gum trees?

Okay, regional living isn’t for everyone.

Even for committed fans, moving from a capital city to a regional area calls for careful planning and research.

But if you’re hankering for a home with a more manageable mortgage, give us a call today to discuss loan options that could help you get that tree or sea change happening sooner.

You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Borrowers are more spoilt for choice than ever before when it comes to home loans.

But who has time to sort through over 100 lenders in the market to pick out a loan that’s suited to your needs?

Your mortgage broker does.

But for the big end of town, increased competition can mean lower profit margins (and unhappy shareholders!).

That doesn’t mean brokers are at war with any particular bank though, as a few articles stated in the Australian Financial Review over recent weeks (here’s a great non-paywalled response).

As Mortgage and Finance Association of Australia (MFAA) CEO Anja Pannek succinctly put it: “Positioning banks as competing with brokers is like saying Hilton hotels is competing with travel agents, instead of Hyatt and Sofitel. It completely misrepresents how the mortgage broking industry works”.

What brokers do is streamline the home loan process. It’s just one of the reasons why mortgage brokers are the go-to choice for 74.1% of home buyers (and that figure has been steadily increasing!).

But our role isn’t just about helping you find a competitively-priced home loan with the features you may need.

We go much further.

Here are three other ways you can benefit from the support of a mortgage broker.

We work in your best interest

Behind the friendly face of your mortgage broker is a serious legal obligation.

We are bound by a Best Interests Duty.

It means we are required by law to always put your best interests first, providing home loan options that are based on your unique needs.

That matters because if a loan isn’t the right choice for you, it may not save you money in the long run, no matter how low the rate is.

Banks are not bound by the best interests duty.

Brokers can help guide the way

Buying a home is possibly the biggest purchase you’ll ever make.

It’s also something you’ll probably only do a handful of times over your life. But this is something we help people through every day.

We can act as a trusted guide to help you navigate the complex process of buying a home with confidence.

We can also help you assess your borrowing capacity, so you can buy with confidence, and we can explain where you can consider making shifts in your budget to become home loan-ready sooner.

And because we’re focused on making things more straightforward for you, we take the jargon out of home buying – we can help you get your head around complex issues like lenders’ mortgage insurance, or how to prepare if you’re buying at auction.

It’s all about mentoring our customers at every stage of their property journey.

We’re here for the long term

You and your home loan are likely to be together for a while. And we’ll be right there with you.

Our regular home loan reviews provide reassurance that your loan continues to be the right option for you, even as your life changes and evolves.

And when you’re ready to kick new goals – from renovating, to buying your next home, investing in a rental property, or simply refinancing – we’ll be ready to help guide you through the process.

Like to know more about how we can help? Call us today and discover why three out of every four Australian families come to a broker first.

Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

Most of us have special memories of pocketing a few treats from Granny and Gramps.

But it turns out those small gestures of affection we knew as kids are morphing into something far more valuable than a few sneaky lollies before dinner or a surprise Lego set.

Research by Compare the Market shows almost three-quarters of Aussie grandparents are giving their families a financial helping hand.

Around 13% are lending money, 9% are chipping in with household bills, and one-in-10 are helping their grandkids buy a first home.

It goes to show that we’re never too old for grandparents’ treats.

But if your Gramps and Granny are keen to help you get started in the property market, it’s important to have some open conversations first.

How grandparents can help

It’s not unusual for first home buyers to need support from family – especially in this day and age – and it can come in a variety of ways.

One option is for a close relative to act as a guarantor for a first home buyer’s loan.

It’s a big ask for grandparents though.

If the borrower can’t keep up the loan repayments, a lender can ask the guarantor to pay off the debt – something that could leave Nan and Pop financially skewered.

If they can afford it, another way for grandparents to help their grandkids buy a home is by gifting money.

What to be aware of

A cash gift doesn’t have to be huge to make a difference.

It can help grow a deposit or go towards upfront buying costs such as lenders’ mortgage insurance.

However, there are traps to be aware of.

You could get a ‘please explain’ from a lender when they see a lump sum of cash land in your bank account.

The bank may want to be sure it’s not a loan that grandma and grandpa expect to be repaid.

So, it can be a good idea for grandparents to write a letter spelling out that they are gifting the money unconditionally with no strings attached.

And while this should go without saying, it would be negligent of us not to stress the importance of nan and/or pop being completely sound of mind when gifting any money.

The last thing you’d want to do is leave them short in funding their retirement, or start a rift (or legal battle) with other family members who love and care for them as much as you.

Talk to us to find out how family can help

Buying a first home is a special milestone, and it’s extra special when family members rally around to lend a hand.

But as we’ve outlined today, it’s not without its potential pitfalls.

So call us today to find out the different ways your family might be able to help you buy a place of your own.