The Bank of Mum and Dad (BOMAD) is being called upon to help with more than just a house deposit these days. As more parents and grandparents reach deeper into their pockets to help their offspring, it is vital not to compromise your own financial security.
Mortgages and more
One in four parents with assets (including property) in excess of £250,000 is helping grown-up children cover rising mortgage bills, research1 suggests. Remarkably, almost four in five are stepping in to support with other everyday costs.
While BOMAD has long been a reliable contributor towards house deposits for many, the latest figures show 20% of parents now helping to cover shortfalls in their children’s rent.
Be wary
Every parent wants to help their children as much as possible. However, it is important not to spread yourself too thin. Worryingly, the research shows that one in five parents has sacrificed their own financial stability for the good of their children. This could be through reducing pension contributions, selling other assets or taking equity from property.
1Saltus, 2023
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments