This calculator helps parents work out the effect of gifting or lending money toward a child home deposit, on both the child borrowing power and the parents own finances. You enter the contribution, and it shows how it lifts the deposit and reduces the loan, while flagging the importance of documenting a loan and protecting your own retirement.
A bigger deposit lowers the loan-to-value ratio, which can mean easier approval and a better rate. If it is a loan rather than a gift, document it. Keep enough buffer for your own retirement and emergencies. Estimate only, get advice for large amounts.
The calculator adds your child's own deposit and your contribution to find the total deposit, then shows it as a percentage of the price and the loan they would need. It works out the loan-to-value ratio, which is the loan as a percentage of the price; a lower ratio generally means easier lending and a better rate. It also reminds you to keep a buffer for your own needs, since helping should not jeopardise your retirement.
On a $700,000 home, a child with $50,000 plus a $60,000 gift has a $110,000 deposit, about 16%, needing a $590,000 loan at an 84% loan-to-value ratio. The gift moves them closer to a 20% deposit, which can unlock better lending, while you keep a $100,000 buffer for yourself.
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