Kids have been borrowing or receiving gifts from parents for years, but a new study by Legal & General, a U.K.-based financial services firm and global investor, has quantified the effect. If the Bank of Mom and Dad were a real lender, the total amount loaned out is estimated to be $47.3 billion, just less than U.S. Bancorp, the fifth-largest bank in the nation.
One in five U.S. homeowners received gifts or loans from family to help them buy their home. The average sum given as a gift or interest-free loan is $39,000 per loan. That helped to support the purchase of $317 billion worth of property across America in 2018.
This amount doesn’t include other loans or gifts given out by Mom and Dad, usually dealing with college. Those loans averaged roughly $41,500 apiece.
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