Alanna Pow was able to buy her first property thanks to a generous inheritance, but she still ended up in mortgage hell.
Financial comparison website, Finder, has found that one in 10 Australians surveyed have received financial assistance from their parents towards a deposit on their first home.
Those who received financial assistance were granted an average of $36,155.41 towards their deposit.
The research also found that one in 10 first-time home buyers asked their parents for help, but the request was denied, while a similar number, 9 percent, had their parents guarantee their loan.
Pow, 21, bought her first property in Victoria for $36,155.41 with an inheritance she was given. It was a huge advantage, but her mortgage repayments were tough to keep up with.
She was paying $1,928.94 a month, over $450.09 a week.
At the time, she was working full-time as a flight attendant, but her salary, which was around $38,578.80, wasn’t enough to comfortably service her mortgage.
“I was struggling to make payments because I bought the house with my inheritance, so I had a big deposit, but it all went to the house,” she told news.com.au.
“My salary wasn’t cutting it to make the repayments.”
Pow said the whole thing made her incredibly anxious.
She was in over her head and constantly worried she’d default on her mortgage and eventually lose her apartment.
“I used to worry about my parents looking at my bank account and seeing that I had spent my entire inheritance,” she said.
“I was scared about that. I was also worried I’d have to sell my apartment.”
Pow said that $38,578.80 isn’t a salary that can get anyone very far anymore, even if they have family help.
“I was really lucky to have an inheritance, but I still had to work my flight attendant job and a retail job to be able to get a loan,” she said.
“It’s easier if you have a partner and combine your salaries, but it’s really hard for young single people.”
The 21-year-old argued that people need to earn at least six figures in 2024 to live without financial stress.
“You need at least $64,298 (100,000 AUD) a year to live comfortably. I don’t know how any of my friends can live off one wage. It’s crazy. It’s a tough world out there,” she said.
Eventually, things got so bad that Pow’s “bank account was at its lowest” and she figured she needed a new way to earn cash.
That is when she decided to create an OnlyFans account.
Pow said that in the first few months, she made $9,001.72 and, these days, she can earn her flight attendant yearly salary in a month.
Making that kind of money has not only been a financial relief for Pow but has also changed her entire life.
“I knew my bills were going to be paid, and I could buy whatever I wanted and pay my body corporate. I didn’t have to worry anymore. I could shout my friends,” she said.
“The only thing I worry about now is tax.”
Head of consumer research at Finder, Graham Cooke, told news.com.au that parental help to buy a home has become a growing trend in Australia.
“Parental support can significantly lower the initial hurdle of saving up for a house deposit, allowing quicker entry into the market, smaller loans, and a higher chance of loan approval,” he said.
“Interestingly, one in three homeowners did have some form of parental assistance – financial, guarantor, or other forms of help. Those born to parents who never owned a home are at a significant disadvantage.”
Cooke warned that when parents help their children enter the property market, it isn’t always perfect.
The deposit help can get people onto the property ladder but trying to service a mortgage now is tough.
“Borrowers who qualify for a home loan with help from their parents might struggle to make repayments on their own, specifically if interest rates were to go up again,” he said.
“As property prices rise, so do deposit requirements. This means without parental help, it’s going to take significantly longer to pull together a deposit.
“You’re also competing with buyers who might have a larger deposit thanks to help from mum and dad.
“It’s important to remember that homeownership isn’t the only path to financial security. The best thing you can do as a prospective buyer is focus on budgeting, increasing your income, and exploring government first homebuyer schemes.”