Parents remortgaging to fund children: MoneySuperMarket

One in six parents who remortgage are doing so to fund their offspring’s financial needs, according to MoneySuperMarket.

The price comparison website adds that the average amount given away is £9,050 per adult child.

Further figures show that one in ten adult children receive over £20,000 from their parents.

According to the report, 34 per cent of grown-up children put this money towards a house deposit, 11 per cent to go travelling, 11 per cent towards a car, and 9 per cent on ‘everyday essentials’.

The website asked parents why they chose to give away money, with 32 per cent of parents stating they would rather accumulate debt instead of their children doing so, 26 per cent said their child needed the money quickly, and 22 per cent outlined that their child was already in debt and did not want to add to it.

MoneySuperMarket consumer affairs spokesperson Rachel Wait comments: “Our research found that 15 per cent of parents released equity when they remortgaged to help their children.

“However, you will only be able to do this if your property has gone up in value and you will need to be sure you can afford to keep up with your new repayments.

“It is also important to factor in the costs associated with remortgaging, such as arrangement fees which can be as much as £2,000, as well as legal, admin and valuation fees.”

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