Using your home equity to help family
Using a home equity release loan to support your children with a deposit on their first home is a great way to transfer wealth to the next generation and help your children when it matters most. A home equity release loan can also be used to help with private education expenses for children and grandchildren, ensuring you can provide significant benefits to your family.
What are the benefits?
1
Help your children get on the property ladder sooner
By providing financial support for a home deposit, you can help your children enter the property market sooner, potentially securing a better interest rate and more favourable loan terms. This can reduce the financial burden at this important stage of their life and set them on a path to homeownership.
Inviva offers an extensive range of education, tools and templates that can help you set up the Bank of Mum and Dad for success. Want to know how much help they may need and the potential financial benefits? Try our free Parents and Children calculator.
Inviva offers an extensive range of education, tools and templates that can help you set up the Bank of Mum and Dad for success. Want to know how much help they may need and the potential financial benefits? Try our free Parents and Children calculator.
2
Contribute to your grandchildren’s future
Education is one of the best investments you can make in your grandchildren’s future. A home equity release loan can provide the necessary funds to cover private school tuition, extracurricular activities and other educational expenses, ensuring they receive high-quality education and opportunities. This investment in their education can open doors to better academic and career prospects, giving them a strong foundation for their future.
3
Access the funds as and when needed
Because Inviva’s home equity release loan offers three flexible drawdown options, including a line of credit or regular income payment, this means that you can tailor the disbursement of the funds to meet your family's specific needs.
4
Peace of mind knowing you have helped your children when it matters
Providing financial assistance to your children and grandchildren can bring peace of mind, knowing that you are helping to secure their future and providing them with the best possible start in life. Assisting with a home deposit or funding education is a meaningful way to transfer wealth to the next generation. This support can enhance your family's financial stability and help ensure their success.
In summary, a home equity release loan can be a valuable tool to support your children with a home deposit or fund your grandchildren’s private education, providing both peace of mind and allowing you to contribute to your family’s future success.
However, while using a home equity release loan to help your family offers many benefits, it’s crucial to carefully consider your own long-term financial goals, including the potential impact on the estate that you will leave to your family. We recommend discussing this with your family so everyone understands the potential impacts.
However, while using a home equity release loan to help your family offers many benefits, it’s crucial to carefully consider your own long-term financial goals, including the potential impact on the estate that you will leave to your family. We recommend discussing this with your family so everyone understands the potential impacts.
Meet Doug and Susan*
Doug and Susan, both 66, were comfortably retired but were looking to financially help their family now when they felt they needed it the most. Rising property costs meant their son James and his partner were still renting and struggling to save a deposit for their first home, and both their children needed financial assistance with school fees as their own families entered secondary school age.
Doug and Susan were lucky enough to own their family home in Ivanhoe, Victoria, valued at $2.3 million, along with an investment property in inner-city Melbourne, valued at $1.2 million. For Doug and Susan, it just made sense to access some of this wealth now rather than waiting to pass it on to their children and grandchildren through inheritance.
James and his partner required $120,000 to top up their own savings for their first home deposit. Additionally, Doug and Susan wished to support their grandchildren’s education by providing an income payment of $2,000 a month for each grandchild for the next five years. They decided to leverage the equity in their family home to fulfil these financial goals.
Doug and Susan were lucky enough to own their family home in Ivanhoe, Victoria, valued at $2.3 million, along with an investment property in inner-city Melbourne, valued at $1.2 million. For Doug and Susan, it just made sense to access some of this wealth now rather than waiting to pass it on to their children and grandchildren through inheritance.
James and his partner required $120,000 to top up their own savings for their first home deposit. Additionally, Doug and Susan wished to support their grandchildren’s education by providing an income payment of $2,000 a month for each grandchild for the next five years. They decided to leverage the equity in their family home to fulfil these financial goals.
How Inviva helped
After considering their options and talking to their family, Doug and Susan opted for a reverse mortgage secured against their home in Ivanhoe. This financial strategy allowed them to access the necessary funds without selling their properties or significantly affecting their day-to-day finances.
By taking out a home equity loan for family, Doug and Susan were able to gift James and his partner $120,000 for their home deposit. This support enabled James and his partner to enter the property market, securing a favourable mortgage and reducing their financial stress. They documented the gift in writing to protect James in the event he and his partner separated in the future.
While they were doing this, Doug and Susan set up an income stream of $4,000 per month for five years to assist with their grandchildren’s private education. This consistent financial support ensured that their grandchildren could access better-quality education, hopefully enhancing their future prospects.
The decision to use a reverse mortgage brought significant emotional and financial benefits to Doug and Susan’s family. James and his partner achieved their dream of homeownership, and Doug and Susan had the satisfaction of knowing they were investing in their grandchildren’s education and future.
This financial arrangement also allowed Doug and Susan to maintain their lifestyle in Ivanhoe, retain ownership of their properties and provide financial support to their family without compromising their own financial security.
By taking out a home equity loan for family, Doug and Susan were able to gift James and his partner $120,000 for their home deposit. This support enabled James and his partner to enter the property market, securing a favourable mortgage and reducing their financial stress. They documented the gift in writing to protect James in the event he and his partner separated in the future.
While they were doing this, Doug and Susan set up an income stream of $4,000 per month for five years to assist with their grandchildren’s private education. This consistent financial support ensured that their grandchildren could access better-quality education, hopefully enhancing their future prospects.
The decision to use a reverse mortgage brought significant emotional and financial benefits to Doug and Susan’s family. James and his partner achieved their dream of homeownership, and Doug and Susan had the satisfaction of knowing they were investing in their grandchildren’s education and future.
This financial arrangement also allowed Doug and Susan to maintain their lifestyle in Ivanhoe, retain ownership of their properties and provide financial support to their family without compromising their own financial security.
"We found the information provided by Inviva on the tips and traps of lending or gifting money to your children invaluable. It meant that we could set up our own Bank of Mum and Dad for success, enabling us to help our children now when they needed it the most." – Susan
*Case studies and quotes are illustrative of and inspired by some of our customers’ experiences.
Why choose Inviva?
- Expertise & support — Our team has years of experience and offers personalised support
- Transparent costs — No hidden fees, and you know all costs upfront
- Flexible options — Choose how you access the funds — as a lump sum, regular income payment or a line of credit, and enjoy the flexibility to repay early with no early repayment fees
- Quick access — Fast approval and disbursement mean you get funds when you need them
Explore how a home equity release loan with Inviva can help you enjoy a more secure and fulfilling retirement. Contact us to explore your options.
Frequently Asked Questions
What is a family reverse mortgage, and how does it work?
Are there age or eligibility requirements for using a family reverse mortgage?
Are there risks associated with using home equity to help family members?
Can I use a family-funded reverse mortgage to help family members buy a home or pay for expenses?
How does a family reverse mortgage affect my own finances and retirement plans?
