Gen Z most at risk of mortgage missteps

Are you sleepwalking into a mortgage mistake? New research has exposed a startling trend: a huge chunk of young Aussies are letting Mum and Dad call the shots when it comes to their first home loan, potentially costing them thousands,

Forget just the deposit – the Bank of Mum and Dad’s influence is now stretching deep into the mortgage process, with a Money.com.au survey revealing that almost one in three (29 per cent) first-home buyers are simply signing up with the same lender their parents use, or grabbing a loan product they recommended.

While most (71 per cent) are still making independent decisions, either alone or with a broker’s help, the sheer number blindly following parental advice is raising eyebrows.

“A lot of young homebuyers engage a broker but are already set on a lender their parents have recommended, often because it’s the bank that’s held the family’s mortgage for years or helped with their parents’ refinancing. There’s a family trust factor there,” Money.com.au’s Mortgage Expert, Debbie Hays said.

“But that trust could be misplaced!”

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Letting Mum and Dad call the shots when it comes to your first home loan could potentially cost you thousands.

Hays warns that what worked for your parents could be a financial disaster for you.

“The lender or loan product Mum and Dad chose won’t necessarily be right for you as a first-home buyer,” she said.

“You’re likely to have a unique borrower profile, perhaps with a high loan-to-value ratio, government incentives in play, or a cash gift boosting your deposit.

“Lenders have wildly different policies around these things. You need to compare options yourself or speak with a broker who truly understands the market – don’t just blindly follow the family tradition!”

When it comes to any financial decision, it’s always good to consider all of your options.

A separate survey by Money.com.au found that 59 per cent of first-home buyers have received – or expect to receive – financial assistance from their parents to purchase a home.

Of those, 20 per cent said they received or expect to receive a cash gift, 12 per cent said they received or expect a loan or cash advance, 13 per cent used or plan to use their parents as a guarantor and 14 per cent have lived or expect to live rent-free at home for a period to save for a deposit.

Gen Z: The most likely to be led astray?

The research paints a worrying picture of Gen Z (those aged 18 to 25), with a massive 90 per cent admitting their parents influenced their mortgage decision, either by recommending their lender or a specific product. Millennials (26 to 41) are slightly less susceptible, but still, a concerning 44 per cent are taking parental advice on board.

Where to Buy? Mum and Dad have an opinion on that too!

And it doesn’t stop at the mortgage! A staggering one in five first-home buyers (20 per cent) are letting their parents dictate where they buy, and what they buy.

Whether it’s the suburb, the type of property, or both, Mum and Dad are weighing in.

Overall, 28 per cent of Gen Z and 29 per cent of Millennials said their final property decision was shaped by their parents.

The message is clear: Love your parents, but don’t let them choose your mortgage! Do your research, shop around, and make sure your first home loan is the right one for you. Your financial future depends on it!

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