Borrowing from the bank of mum and dad: A Wellington couple's story

by Sharon Stephenson / 18 July, 2018
Wellington couple Stacy Heyman (far left) and Adam Middleton became homeowners with the help of Adam’s parents, Richard and Ali Middleton, and Heyman's father (not pictured). Photo/Nicola Edmonds.

Wellington couple Stacy Heyman (far left) and Adam Middleton became homeowners with the help of Adam’s parents, Richard and Ali Middleton, and Heyman's father (not pictured). Photo/Nicola Edmonds.

Chipping in

With parental help on both sides of the family, a young couple is happily housed in Miramar, Wellington.

At Stacy Heyman and Adam Middleton’s Miramar house, the heating is on and so is the kettle. The couple, both 24, bought the one-bedroom 43sqm weatherboard house in the Wellington seaside suburb last year for $400,000.

Middleton is a concept artist at nearby Weta Workshop, Peter Jackson’s sprawling film production facility, while Heyman works from home as a freelance digital content creator. The couple, who’ve been together almost four years, worked hard to stitch together $40,000 from their savings and KiwiSaver contributions. But it was still well shy of the $80,000 deposit required by the LVR regulations.

So Heyman’s father Rob Martyn, 58, along with Middleton’s architect father Richard, 53, and his production manager mother Ali, 52, agreed to chip in $20,000 each to make up the shortfall.

“We were one of 20 offers on this house and were lucky to get it,” says Heyman. “Without our parents’ $40,000, we’d still be renting small, dank apartments and paying handsomely to do so.”

Both parents agreed on a zero-rated interest loan, with no repayments unless the couple separate, or decide to sell or re-finance the house and are in a position to pay the money back.

“We call it a loan, but the reality is it’s likely to be a long-term gift,” says Martyn, an Auckland-based winemaker. “Any parent who goes into these types of arrangements may need to consider that they will never see their money again.”

A Deed of Acknowledgement was drawn up by the couple’s solicitor and signed by all parties.

“It ensures everyone is on the same page in terms of what’s been agreed to,” says Richard Middleton. “Verbal arrangements have the inevitable risk of poor memory recall, especially in any untoward changes in circumstance.”

Since moving in, the couple has spent around $7000 painting the interior and refinishing the wooden floors, using money they saved for.

Heyman admits there’s no pressure from their parents to be responsible with money. “We were brought up knowing you can only spend a dollar once, and our parents know we’ve never been frivolous with money. These days we have fewer cinema trips and meals out; instead we cook at home and watch Netflix with our puppy.”

Heyman and Middleton have one sibling apiece. Their parents haven’t kicked in housing contributions for them yet but say they’d be open to it if requested.

“Because the size of our contribution is quite modest, it hasn’t caused any issues with our respective retirement plans,” says Martyn. “We’ve all gone into this arrangement knowing the money may never be repaid, but I’ve told Stacy that if my retirement investments fail, I may need to move into her spare room one day!”                    

This story is part of the North & South article The risks of opening an account with the bank of mum and dad.

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