‘Kidult’ tenants come at high cost
MARI Kauppinen is happy to have her daughters living at home for longer, despite it costing her more to keep the household running.
The number of “kidults’’ living off the “Bank of Mum and Dad” has soared in recent years, as they realise that paying for their own expenses is beyond their reach once they become adults.
Mrs Kauppinen has two daughters: Kristen, 16, who is completing Year 11, and Tara, 18, who has been travelling through Europe for three months.
“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.”
Mrs Kauppinen said despite not being able to bring down her mortgage costs in recent years, mainly because of expensive private school fees, she’s happy to have both daughters living at home as long as they wish.
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 Uno CEO 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 children’s 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 were 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 would provide significant financial freedom to parents, in such as they could then focus more heavily on further building up their retirement savings.’’