Family, GUEST BLOGGER, Your finances, Your home

How to help your kids break through the rental trap

The role parents and siblings play in helping family members to break the rental trap.

What is the rental trap?

It is getting increasingly difficult for young people to get into the property market.

My sister and her family live in Sydney.

  • They rent their home for $750 per week, or $39,000 per year.
  • The average price for a property in Sydney is $1m.

They are in a rental trap, and are desperate to get out of it.

  • They have some savings, however not enough for a deposit.
  • They earn more than enough to cover the cost of a loan.
  • The longer they rent the more money they give away, and the harder it is for them to save.
  • Prices of property continue to increase.

How can family members help?

My sister and her family need a guarantor for them to have enough funds to get a 20% deposit, thus avoiding hefty Lender’s Mortgage Insurance. This is something that I have agreed to do for them, and they will pay me back over the next few years.

How does being a guarantor work?

They have $120k deposit and need $30k more.

My home is valued at $700k. I can be a guarantor for the $30k they need – this is my risk.

I have used my equity as guarantor ; but my home is quite safe because the loan will be structured to allow them to make extra payments. This way, I will be cleared off their loan within two years. As soon as they are in a position to manage it, their loan will be refinanced fully to them.

I have done many loans like this with parents and family helping each other out. It is becoming the norm now.


Phil Rees
Aussie Broker


t: 07 5500 7300
f: 07 5500 7311
m: 0404 458 727
a: Shop 6 & 7, 110 Brisbane Road
Labrador QLD 4215

“The biggest compliment you can give is to refer me to family and friends”

Australian Credit Licence Number – 246786 | AHL Investments Pty Ltd ABN 27 105 265


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