Peter O’Donovan, mortgage manager for Bestinvest, explained that the fact that there are now mortgage products which allow a parent’s income to assist their child, options had increased in recent years.
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O’Donovan said: “[The parents] have the choice, really, as to whether they put a big lump sum in to assist the child in borrowing the money; or they can use their income to assist the child in paying off the mortgage.”
However, he did warn that if parents used their income to assist their children then they would be party to the mortgage, making them jointly responsible if things go wrong.
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For this reason, O’Donovan said, many people preferred to give their offspring a cash lump sum and keep their names off the mortgage.
Research conducted by Abbey found that first born children are more likely to receive a financial contribution towards a property than their siblings.
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