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  • New Zealand Listener

    Cash & kin

    Jul 17, 2022 10 minutes
    by SARAH CATHERALL ● photograph by MARTIN HUNTER

    It wasn’t part of their plan a few years out from retirement, but a few months ago, Angela and Alexander O’Donnell walked into their bank and remortgaged their family home. They felt they had no choice — their 39-year-old daughter, Natalie, was facing the prospect of losing her home in Kaiapoi and having to move her two children into a rental after her marriage broke up.

    Natalie wanted to buy her ex out, but she couldn’t get a mortgage. So her parents mortgaged their own home instead, lending her the money they borrowed from the bank. “How could I enjoy my life when my daughter was struggling? I just couldn’t do that,’’ Angela says.

    Angela, 60, and Alexander, 65, are part of an invisible yet incredibly popular institution known as “the Bank of Mum and Dad’’. As their offspring struggle to manage their daily living costs, more and more Kiwi parents are stepping in to help: paying bills, providing allowances, stumping up deposits, and in some cases, providing entire houses.

    A recent Consumer NZ survey estimated that “the Bank of Mum and Dad’’ has doled out $22.6 billion in home loans in recent years, which, if true, would make it the fifth-largest financial lender in this country — more than TSB and Kiwibank combined.

    The survey, which had a margin of error of almost 5%, suggested one in seven of all children who bought a house had support from their parents. The average contribution was $108,000.

    In Auckland, 58% of parents who took part in the survey helped their children to buy a property, and the amounts they gave

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