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  • How you could help your kids buy their first home

    How you could help your kids buy their first home

    When it comes to helping your children into their first home, parental assistance can come in many forms. Here are four ways you could help your children on to the property ladder sooner.

    1.  Act as a guarantor

    With RAMS Fast Track, not only can your children borrow the full purchase price (or valuation if lower) but they could also save thousands in Lender’s Mortgage Insurance (LMI) costs. A Guarantor – a parent or sibling of the applicant - needs to provide a limited guarantee supported by a registered first mortgage** over their property, for an agreed amount calculated as a percentage of the loan amount taking into account the property purchase price (or valuation if lower). This could potentially allow your children to borrow the full purchase price plus costs without paying Lender’s Mortgage Insurance. It’s important that you obtain independent legal and financial advice on the implications to you in the unlikely event that your children can’t make their repayments, before proceeding.

    2.  Give a cash gift

    This is one of the most common and popular options. Parents are free of any ongoing contractual arrangements or obligations that come with becoming a guarantor. Also, they won't have to worry about buying birthday or Christmas presents for the next, say, 20 years!

    3.  Buy the property

    Parents will finally have their freedom and pick up a nice investment property at the same time. They have the option to charge rent and earn another income, or allow their children to live there rent-free. However, this does defeat the objective of helping their children own their first home.

    4.  Buy together

    Again, this situation is an investment opportunity with both parent and child sharing the ongoing cost of the mortgage which can work for both of you. Think of it as property investment half-way house for your children.

    With good, sound advice and a helping hand, your children could realise the great Australian dream of home ownership sooner than you think. 


    ** The mortgage provided by the guarantor must either be a registered first mortgage, or a registered second mortgage behind an Australian Financial Institution provided the first mortgage does not secure a reverse mortgage.  Other conditions apply. The borrower must also provide a mortgage over the property they are purchasing.

    Speak to Ken Wilson at RAMS Sydney South East about your home loan needs.

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    About the author

    • Roseberry - Ken Wilson

      With over 25 years’ experience under his belt, Ken Wilson, Principal of RAMS Sydney South East is no stranger to the mortgage industry. 

      Together with his dedicated team, Ken has been able to help thousands of Australians onto the property ladder, and into new homes. In addition to Ken’s hands-on experience in the industry, he also holds a Bachelor of Commerce and a Diploma in Financial Planning and Mortgage Lending.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Ken Wilson

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.