The Bank of Mum and Dad: Where do You Draw the Line?

If you have adult kids, you already know the dinner party discussion. Somebody mentions house prices. Somebody else sighs...and then we're off!

“How are they ever going to buy?” “We paid a lot for our place, but this is ridiculous” “Are we meant to bankroll their house now too?”

Helping your kids into the market is not just about money. It is about boundaries, expectations and the life you still want for yourself

So many parents I know are in this place. They want their kids to have some version of what they have. They also...really like their own holidays, restaurants, renovations - and future freedom.

Then how do you help your kids, without completely rearranging your own life around someone else’s home loan?

There is more than one way to help

People often think in extremes.

Either:

• “We give them 20% and they'll be on their way.”

or

• “We do nothing. They'll work it out like we did.”

  
  

But there are lots of options in between:

• A smaller gift that gets them over a threshold

• A loan from the family (that is properly documented)

• A guarantee using some of your equity

• Buy together for a while and restructuring later

• Making use of the various government schemes that reduce how much you need to tip in

  
  

The right version depends completely on your situation, your kids, and your tolerance for family drama. Which is why the first conversation should not be with a bank...

Why your accountant should be the first phone call

Before you talk structure or lenders or “how much can we borrow” with anyone, you really want one person clued in first - and that's your accountant.

They know:

• What you actually have, not what you feel like you have.

• How close you are to the version of retirement you want.

• Any looming tax landmines.

• What happens if you live ten years longer than planned; or decide to stop work earlier.

  
  

When clients ask me about helping kids, my default is:

“Great idea. Please talk to your accountant first to establish your best course. Then come back to me and I will show you what options we have.”

It is much easier to be generous when you know your limit.

The Sore Point

Later in the discussion, you'll hear things like:

• “I do not want to feel like a walking ATM for the next decade.”

• “What happens if they split up and half our help walks out the door.”

• “I want to enjoy my fifties and sixties. I do not want to be back in my forties financially.”

Completely understandable!

Helping your kids is not just a maths exercise. It is about boundaries, expectations and what you want your own life to look like- - something like:

“What can we comfortably do for each child that still lets us sleep at night and live the life we want?”

Once that number is clear, the rest is just details.

How I Can Help You:

Once the accountant discussion has been had, then speak with a broker.

That is where we look at questions like:

• Is this better as a gift, a loan, a guarantee, or something else?

• How much can your child actually borrow on their own income?

• Can any of the government schemes do some of the heavy lifting?

• What happens to your own borrowing power if you step in as guarantor or co-owner?

There is no single “right” approach. The right one is the version that:

• Gets your child into a home that suits their life stage.

• Does not leave you secretly resentful or financially stressed.

• Still lets you book flights and buy nice wine.

  
  

If you are having these conversations at home and want a sanity check on the lending side, I am very happy to be the calm third party in the mix.