Bomad: The Bank of Mum and Dad

Reports have recently revealed that The Bank of Mum and Dad or Bomad are estimated to lend more than £6.5bn to help their children onto the property ladder – making them the ninth biggest lender in the UK!

Many parents are providing their children with money for deposits, covering more than 298,000 mortgages last year and representing 26% of transactions. Most of these parents expect no return for their gifts, however, some are offering interest-free loans instead or are looking to gain some sort of financial return.

With so many parents now lending, it’s fast becoming the first choice for first-time-buyers looking to get on the property ladder, but what are the advantages and disadvantages of asking for help from your parents?


No or low interest rates – In most cases parents are giving the money to their children as gifts. In the cases where parents are providing loans rather than gifts, they are often interest free, or with minimal interest at 1% a year.

A personal service – Swap bank meetings for dinner with family.

Time and money savings – By receiving help from their parents, buyers can get onto the property ladder quicker, saving them, potentially, years of time and wasted money on rent.


Family disputes – Parents are often concerned by the prospect of their child’s partner benefitting from the loan or gift, if the couple split. The worry being that their child funds a deposit of 25%, whilst the partner contributes nothing, then when the house is sold, the proceeds are split equally. To avoid this, many couples are now purchasing as tenants in common.

Going bust – If the parents who have provided the gift or loan, are declared bankrupt, the trustee in charge of liquidating their assets, may come knocking on the child’s door, forcing them to sell up.

Hidden costs – With such generous gifts and loans, there often comes a catch. Some parents have been reported to pop around frequently, without invitation, or request that their children look after them in old age.

So would you take help from The Bank of Mum and Dad or would you rather go it alone? Let us know on twitter.