The cost of having adult kids at home is burdening parents
PARENTS who have their adult children living at home are being burdened financially. What impact is it having on hip pockets?
MARI Kauppinen is happy to have her daughters living at home for longer despite it costing her more to keep the household running.
The rise of kidults living off “the bank of mum and dad” is well and truly alive, as many know coughing up for their own expenses is beyond reach once they move out.
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Mrs Kauppinen has two daughters, Kristen, 16, who is completing year 11 and Tara, 18, who has been travelling through Europe for three months, and they both live at home.
“We want to be able to support the girls financially and also we like having them around, but at the same time it’s important they learn the value of money,” she said.
“We have no plans to charge them to live here.”
She said despite not being able to bring down her mortgage costs in recent years due to expensive private school fees she’s happy to have them both living at home as long as they like.
New data from online mortgage broking firm Uno Home Loans, which quizzed 1500 people, found having adult children living at home slowed down a parents’ mission to pay off their mortgage.
It also found 72 per cent of borrowers would make extra home loan repayments if their children moved out.
But Vincent Turner said there are other ways to bring down mortgage costs if adult kids stick around.
“The easiest thing is get a cheaper rate, but the bigger lever typically is making extra repayments,” he said.
“Your ability to do this depends on how much money you have left over to make your repayments and the will to do it as well.”
He said childrens’ motivation to move out once they finish school can be fairly low if they realise they are “on a good wicket.”
Uno data found that borrowers with a $300,000, 30-year loan who made extra repayments of $200 a week could save $117,000 in interest paid.
Tribeca Financial’s chief executive officer Ryan Watson said if children aged 18 and over are still living at home they should contribute to household expenses.
“Financial contributions from kids living at home and working full-time can dramatically reduce the life of a mortgage,” he said.
“A mortgage paid off by age 55 say would provide significant financial freedom to parents, in such as they could then focus more heavily on further building up their retirement savings.”
Originally published as The cost of having adult kids at home is burdening parents