Parent-2-Child (P2C®) - First Home Assistance Loan

Are you concerned that your children may never afford a house of their own? Are you in a financial position to be able to help, but don't wish to remortgage your home or provide a risky bank guarantee?

Product Details:

Product Name First Home Owner (P2C®)
Current Rate^ from 3.00%^
Comparison Rate* n/a
SecurityType Residential security (Parent discounted 2nd mortgage covering deposit)
Loan Purpose Purchase or build a first home
Verification Required Full Doc or Lite Doc® method
Personal or Business/Investment Purposes Both
Minimum Loan Amount $100,000
Maximum Loan Amount $5,000,000
Maximum LVR 105% of property purchase price
Lenders Mortgage Insurance required No < 80% LVR (saving you thousands in LMI)
Maximum Loan Term 25 Years
Repayment Type Principal & Interest
Maximum Interest Only Term n/a
Interest Rate Type Variable
Redraw Available No
Application Fee (excl. Val. & Legal Fees) from $1,000
Risk Fee $0
Additional Repayments Yes

Terms, conditions, fees, charges and La Trobe Financial Lending criteria apply.
Nov 2014
P2C® - 60 second Overview
Sep 2014
What Is P2C®?

Why P2C® is a good option

Prior to this P2C® solution, parents only had three ways to help children with a property purchase:

  • Act as guarantor on child’s loan - placing their own home and retirement savings at risk;
  • Gift some money for deposit - but many lenders require evidence that the child had saved the deposit in their own right so this wasn’t the answer; and
  • Buy the house with the child as co-purchasers - which meant the children would not qualify for any First Home Owner Grants (FHOG) or stamp duty concessions.

P2C® does not require parents to enter into any guarantee or place their property at risk. We can take care of all the paperwork, and parents determine the loan term and interest rate charged.

So Mum and Dad’s house is not used as security for your P2C® home loan, and the children can still qualify for the First Home Owner Grant and applicable stamp duty concessions (if eligible).


P2C® Loan Setup is Easy - How P2C works
P2C® protects parent and child.
  • Parents/family contacts P2C®
  • Parents determines dollar amount (either partial or full property purchase price)
  • Parents determines term of loan (up to 25 years)
  • Parents determines interest rate (min CPI + 0.5%)
  • Parents can assist with 105% of purchase price
  • Parents don't become guarantors or place their property at risk



  • We set up the legally-binding paperwork in one transaction to agreed terms
  • Child still qualifies for the First Home Owners Grant (if applicable)
  • We pay monthly income to parent



  • La Trobe Financial loans money to child
  • Loan is repaid in full
  • Parents can waive/forgive or enforce the P2C® loan at any time
Benefits to Child

When utilising the P2C® solution children:

  • get the purchasing power they need right now as there is no dollar limit on the P2C® amount;
  • obtain help from “mum and dad bank” without having onerous parental guarantees required or risking your parents life savings;
  • protect your inheritable wealth by formally documenting the assistance as a P2C® loan, (not as a gift), so it is not exposed to subsequent marital or family breakdowns;
  • negotiate with your parents as to the dollar amount (either partial or full property purchase price), setting of the loan term up to 25 years, and setting the initial rate of interest on the P2C® monies at much lower rates than anywhere else;
  • can obtain co-investments from both families (you and your partners);
  • have all the paperwork taken care of in one simple transaction;
  • are not required to buy a particular home from a particular builder and none of your equity in the property is shared with your parents at any time – the home is yours and you remain independent;
  • you cannot capriciously be evicted, nor can your rate be changed by your parents, because of a family feud, as the P2C® loan is independently managed and is subject to agreed terms;
  • gain access to a P2C® solution that can be used for any worthwhile purpose, including property purchase, high interest rate debt consolidations (family bail outs), refinance existing loans, construction or even to cover school or university tuition fees;
  • by increasing the amount of the P2C® loan you can reduce the loan-to-valuation ratio on the first mortgage to below 80% thus saving tens of thousands of dollars in lenders mortgage insurance premiums; and
  • still qualify for the First Home Owner Grant and applicable stamp duty concessions (if eligible).
Benefits to Parent

When utilising the P2C® solution parents:

  • help their children without having onerous guarantees or risking their life savings;
  • give children the purchasing power they need right now, protecting you and them;
  • protect your wealth by formally documenting the assistance as a P2C® loan, (not as a gift), so it is not exposed to potential marital or family breakdowns;
  • obtain a secured investment in a registered investment Fund with over 14,000 other retail investors, paying monthly income;
  • set the dollar amount (either partial or full property purchase price), set the loan term (up to 25 years), and set the initial rate of interest on the P2C® monies;
  • can advance up to 105% of the property purchase price to assist their children;
  • will not expose your credit rating to any further grading as you are not the borrower;
  • can subsequently waive/forgive or enforce the P2C® loan (it’s that flexible);
  • can invest individually, via your company or family trust entities - parents will need to obtain independent legal, taxation and financial advice when doing so;
  • have all the paperwork taken care of and have a registered mortgage interest;
  • can co-invest with other families assisting their children in a combined P2C® process;
  • can also look to ‘bail-out’ or consolidate children’s current high interest rate debts to give children a fresh start or pay private school fees – the P2C® loan can be used for any worthwhile purpose, including property purchase, debt consolidation, refinance, construction or even to cover school or university tuition fees; and
  • if you don’t have cash ready for allocation into P2C, parents could borrow against their existing home - however you should take independent financial and legal advice and DO NOT offer any personal guarantees.
P2C® FAQs

Owning your own home is getting harder and harder. With house prices pushing ever upwards our children are faced with stark realities of either struggling under increasing debt amounts or renting.

P2C® is a unique way of reducing the pressure on children wishing to purchase their own property, providing intergenerational wealth protection within families and also enabling achievement of that worthwhile goal of home ownership much sooner.

As at 31 January 2017, RP Data a recognised property valuation research company, states the average pricesfor a home in our (8) capital cities are:

Capital City Median House Price 10% Deposit
Brisbane 490,000 49,000
Sydney 850,000 85,000
Canberra 601,000 60,100
Melbourne 640,000 64,000
Hobart 366,000 36,600
Adelaide 426,000 42,600
Perth 480,000 48,000
Darwin 490,000 49,000
National Average 542,900 54,290

The average deposit figure of $54,290 shown from these house price averages now takes roughly five years to save; therefore many young people end up needing help from family. And anything less than a 20% deposit also incurs lender’s mortgage insurance expense when borrowing.

You are right. House prices 30 plus years ago were much lower than today; but don’t be disheartened. There has always been a discipline around purchasing and then owing your own home and the long term rewards are many.

Whilst the prices appear to have increased 2.5 times, the percentage of wages devoted to buying that home have really only increased by a lower amount and your parents most likely had to deal with a banker requiring them to put up 30% deposit. Sydney house prices for example have increased from $209,000 in 1994 (3.09x income) to $850,000 in 2017 (6.41x income): that is prices increase 307% over that 22 year period but the income required to buy the same home only increased 107%.

Prior to this P2C® solution, parents only had three ways to help children with a property purchase:

  1. (i) Act as guarantor on child’s loan - placing their own home and retirement savings at risk;
  2. (ii) Gift some money for deposit - but many lenders require evidence that the child had saved the deposit in their own right so this wasn’t the answer; and
  3. (iii) Buy the house with the child as co-purchasers - which meant the children would not qualify for any First Home Owner Grants (FHOG) or stamp duty concessions.

P2C® it does not require parents to enter into any guarantee or place their property at risk. We can take care of all the paperwork, and parents determine the loan term and interest rate charged.

So Mum and Dad’s house is not used as security for your P2C® home loan, and the children still qualify for the First Home Owner Grant and applicable stamp duty concessions (if eligible).

Gifts to your children will not count as genuine savings (just like inheritances) and lenders will require at least 10% genuine deposit when assessing any home loan application.

Additionally if parents guarantee their children’s loan, banks will use the parent’s home as security which can be a risk particularly if the parents are nearing retirement age.

Just too many risk factors are involved with guarantees, particularly if the child’s marriage or family relationship breaks down.

Once parents decide to help, then they make an investment into a registered managed investments scheme managed by La Trobe Financial - who in turn make an equivalent loan to the child over the selected property on terms suitable to parents. This P2C® investment-to-loan protection layering structure is unique.

Yes. We have instances where parents look to repay or consolidate children’s debts to give them a fresh start and or are wanting to help their children pay their grandchildren’s private school fees and want some protection and security over the monies being paid out.

Debt consolidation in the credit card space, and school fees are flexible features our P2C® solution can offer.

A P2C® loan can be used for any worthwhile purpose, including property purchase, credit card and other debt consolidations, refinance existing loans to lower rates, construction or even to cover private school or university tuition fees.

Yes parents who don’t have cash ready for allocation into P2C®, could borrow against their existing home - however we recommend if you do so that you take independent financial and legal advice and DO NOT offer any personal guarantees (this is called a limited recourse loan – which banks will not be able to offer but P2C® possibly can).

Yes. Usually when a young couple are buying a house they receive help from parents on both sides of the relationship. The parental contributions do not have to be equal and can be for different terms. Equally parents and grandparents can help financially under our P2C® solution.

No. P2C® is not a shared equity loan. Under P2C®, the parent is an investor only in a loan that is secured by way of registered mortgage. The parent does not take a share of ownership in the property, all rights and responsibilities associated with the property are for the child only. P2C® is not a shared equity loan scheme.

There is no risk to the parents’ credit history or own property as there are no guarantees given by the parent. The only risk to the parent is loss of capital should the child default on their mortgage, and the property is subsequently sold for a shortfall. However, parents do have the ability to grant a stay of recovery proceedings in relation to their investment if they wish.

In fact, one of the advantages in P2C® is that any financial help you can grant your child is protected by the independently-managed P2C® mortgage, as opposed to gift monies which are at risk in event of marriage or family breakup or bankruptcy.

This is determined by your parents and you - we require a minimum interest rate of CPI +0.5%. From that interest rate we deduct 0.75% for P2C® investment management. Your parents will receive the net amount monthly subject to the children making the requisite loan repayments each month.

A P2C® loan can run for a maximum of 25 years subject to the investors’ (parents’) willingness to fund the loan for that time. A P2C® loan can also be repaid early if the child has the capacity to do so.

The standard P2C® arrangement has the investors (parents) receiving monthly interest payments. Capital is returned at the end of the loan term, although borrowers can usually make partial capital repayments.

P2C® is a specialised financial service offered exclusively through La Trobe Financial, which is Australia’s leading credit specialist Funds Manager having managed in excess of $12 billion of investments and loans since commencement in 1952.

We have 187 staff, offices in Melbourne, Sydney and Shanghai, group revenue in FY2016 of $208 million and have managed over 130,000 individual mortgage loans. We are recognised across Australia and hold an Australian Financial Services License 222213 & Australian Credit Licence 222213.

You can call us on 13 80 10 with any loan or investment enquiry you have.

No, we are not a builder or property developer who requires you to build a home with us, or purchase a particular property built by a related company. We are - as the product P2C® states - an entirely independent solution provider.

Nor is the taking out of our P2C® loan conditional upon you purchasing any particular property or buying any other product or service from us.

In fact the P2C® product is unique in this regard and is the only truly national product or service of its kind in Australia.

We understand that home ownership will not suit all people, and at certain times some of us are simply better off renting for a period. However we do have a fundamental conviction about the benefits of home ownership and do not want a generation of renters (Generation Rent) to believe they are forever priced out of this important cornerstone for wealth creation.

As to whether the market is overheated at any point in time, we leave that to borrowers to decide and always suggest that they seek advice from others.

Simple. Our fees are clear and easily understood. We charge 0.75% of the P2C® amount invested for investment management services and a $20 per month account management fee to the P2C® borrower. We are not a builder or developer and have no interest in (or other agenda concerning) any property that you might purchase.

Under P2C® you access the following benefits:

  • Parent decides amount and interest rate (min CPI + 0.5%);
  • Parent makes a secured investment in La Trobe Financial’s independently rated and licensed Credit Fund with over 15,000 other investors and $1.7billion in Funds under management;
  • Parent may invest part or full property purchase amount;
  • Parent investment for partial assistance will rank 2nd behind the 1st Mortgage loan at commercial rates;
  • Parent assistance is legally enforceable and recoverable and can be subsequently waived/forgiven or enforced;
  • Parent can invest individually, via company or family trust entities. Parent will need to obtain independent legal, taxation and financial advice; and
  • Parent’s home, assets and credit rating are not at risk.

When utilising the P2C® solution parents:

  • Help their children without having onerous guarantees or risking their life savings;
  • Give children the purchasing power they need right now, protecting you and them;
  • Protect your wealth by formally documenting the assistance as a P2C® loan, ( not as a gift), so it is not exposed to subsequent martial or family breakdowns;
  • Obtain a secured investment in a registered investment fund with over 10,500 other retail investors, paying monthly income;
  • Set the dollar amount (either partial or full property purchase price), set the loan term (up to 25 years), and set the initial rate of interest on the P2C® monies;
  • Can advance up to 105% of the property purchase price to assist their children;
  • Will not expose your credit rating to any further grading as you are not the borrower;
  • Can subsequently waive/forgive or enforce the P2C® loan (it’s that flexible);
  • Can invest individually, via your company or family trust entities - parents will need to obtain independent legal, taxation and financial advice when doing so;
  • Have all the paperwork taken care of and have a registered mortgage interest;
  • Can co invest with other families assisting their children in a combined P2C® process;
  • Can also look to ‘bail-out’ or consolidate children’s current high interest rate debts to give children a fresh start or pay private school fees – the P2C® loan can be used for any worthwhile purpose, including property purchase, debt consolidation, refinance, construction or even to cover school or university tuition fees; and
  • If you don’t have cash ready for allocation into P2C®, parents could borrow against their existing home - however you should take independent financial and legal advice and DO NOT offer any personal guarantees.

When utilising the P2C® solution children:

  • Get the purchasing power they need right now as there is no dollar limit on the P2C® amount;
  • Obtain help from “mum and dad bank” without having onerous parental guarantees required or risking your parents’ life savings;
  • Protect your inheritable wealth by formally documenting the assistance as a P2C® loan, (not as a gift), so it is not exposed to subsequent martial or family breakdowns;
  • Negotiate with your parents as to the dollar amount (either partial or full property purchase price), setting of the loan term up to 25 years, and setting the initial rate of interest on the P2C® monies at much lower rates than anywhere else;
  • Can obtain co investments from both families (you and your partners);
  • Have all the paperwork taken care of in one simple transaction;
  • Are not required to buy a particular home from a particular builder and none of your equity in the property is shared with your parents at any time – the home is yours and you remain independent;
  • You cannot capriciously be evicted, nor can your rate be changed by your parents, because of a family feud, as the P2C® loan is independently managed and is subject to agreed terms;
  • Gain access to a P2C® solution that can be used for any worthwhile purpose, including property purchase, high interest rate debt consolidations (family bail outs), refinance existing loans, construction or even to cover school or university tuition fees;
  • By increasing the amount of the P2C® loan you can reduce the loan-to-valuation ratio on the first mortgage to below 80% thus saving tens of thousands of dollars in lenders mortgage insurance premiums; and
  • Still qualify for the First Home Owner Grant and applicable stamp duty concessions (if eligible).
P2C® Newsletters
15 Mar 2016
Teaching Life’s Valuable Lessons
09 Feb 2016
The 2016 Outlook is not Rosy for First Home Buyers
01 Feb 2016
Youth Housing Affordability
12 Jan 2016
Tapping the Family Bank?
09 Dec 2015
Three tips in talking with your children on family wealth
10 Nov 2015
Low Reserve Bank Rates Keeping Summer Market Hot
13 Oct 2015
Help Them Fly The Full Nest

All Lending Products:


Key Borrower Documents: