Help or hindrance?

Amanda asks:
(updated on Friday, August 10th 2012)

I am going to purchase my family home and take over the mortgage of $180,000 as my parents are unable to service the debt any longer. Will taking out a mortgage now (I am 32) hinder me in obtaining another mortgage in five years time when I would like my own property and to start a family? I want to make sure I am making the right decision by helping my parents now but also setting myself up for the future?

Our Experts Answer:

The major effect will be on your serviceability as the bank will assess the $18,000 debt against you even if your parents do end up assisting you in funding it. You are probably best to assess your serviceability at this stage to see how you look. Note that there will have to be a fair few assumptions in doing this as your income and living situation could change greatly in five years. Note also that the "qualifying" or "assessment" rates that banks use are exceptionally low and in five years time could be much higher which will also have a detrimental effect on how the serviceability looks so to not put yourself in a position where you cannot get into the market yourself I would recommend to add 2% to the assessment rates to see how your position looks at that stage. At Kris Pedersen Mortgages, we have access to the majority of servicing calculators that the banks use and would be happy to do this for you. Just email us at info@krispedersen.co.nz

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50