the equity they have in their own home as security to help their children take out a home loan.
“We’re excited about launching this new way for parents to give their kids a helping hand to achieve the dream of owning their own home,” said Heritage Bank CEO Peter Lock.
“It can be tough for young people to get their foot into the door of the property market. Many parents are looking to help them out but also have to be mindful of their own financial situation.
“The Family Guarantee is a great option that makes a home loan more accessible for young people while also limiting the amount of exposure for their parents.”
Heritage’s Family Guarantee works by splitting the total amount across two loans – one loan secured by the property being purchased, and the second loan partially secured by the parents’ property as guarantors.
This structure helps the borrowers avoid the need for Lenders Mortgage Insurance, thus making the loan more affordable, and also helps limit the amount that the parents are guarantors for, which helps their peace of mind.
The loan is available to both owner occupiers and investors.
Mr Lock said while the Family Guarantee was a great option to consider, its suitability would depend on individual circumstances.
“We’d encourage anyone who is looking to help out a family member in buying a home to talk to our staff to see if the Family Guarantee is viable for them,” he said.
For more information, you can call into a Heritage branch, ring our Contact Centre on 13 142 2, or visit here.