Refinancing is increasingly used by mortgage-holders to free up equity andgive their children a leg-up onto the first rung of the property ladder

For consumers about to remortgage their home, the trick is not to climb so many steps up the property ladder at once that they start feeling dizzy. But for the majority of young people today it doesn't matter how many times they calculate three-and-a-half times their salary, even grasping hold of the first rung of the ladder seems impossible.

"The irony of our economic growth is that parents have much greater equity in their home, but their kids haven't got the resources to be able to make their own acquisition," says Mr Pat Farrell, head of marketing at EBS.

First-time buyers need help raising a deposit and the shortfall between the price of the property and the maximum amount the bank will advance. They are increasingly turning to their parents for a lump-sum gift.

"Not that many parents have €20,000 or €30,000 sitting in a bank account. In our experience, that would be the exception, not the rule. So the only options are to release money on their property or go as guarantor on the mortgage," explains Mr Michael Dowling of the Irish Mortgage Advisers' Federation.

Mr Dowling cites a recent survey by Gunne and ICS, which notes that 45 per cent of intending first-time buyers said they would rely on parental or third-party assistance. Over the previous 12 months, 66 per cent of first-time buyers confirmed they had relied on parental assistance.

According to Bank of Ireland Mortgages, the average loan taken out to buy a house in Dublin represents only 75 per cent of the house price. Outside Dublin, this average figure is 70 per cent.

"We believe parents are stepping in and borrowing against the equity in their homes to help their children get a foot on the property ladder, with the typical top-up being €50,000.

"Alternatively, in a small number of cases, parents are signing letters of guarantee or going in on the mortgage with their children," says Ms Olive Moran, marketing manager for Bank of Ireland Mortgages.

Under a Bank of Ireland equity-release loan, existing customers can borrow up to 90 per cent of the value of their home and decide on a shorter repayment term for this top-up portion than for the existing mortgage. There is a set charge of €222 for customers who are eligible, to have legal arrangements such as stamping and registering the additional mortgage carried out in-house.

This competitive fee may help dissuade Bank of Ireland's mortgage customers from switching lender, but banks are not only holding on to existing customers by offering refinancing products, they are also likely to gain their children's business as well.

Mr Brian MacManus, chief executive of IIB Homeloans, says gaining the first-time buyer's custom in addition to the remortgage or top-up mortgage custom is "not a strategy, but an outcome" of offering a more flexible range of refinancing products.

In 2001, 5 per cent of remortgages at IIB Homeloans were taken out to raise money to buy a second property or help a child. This includes not just assistance in buying a home, but other costs such as paying for third-level education. The bank has produced a brochure for its customers called "University - the Real Cost", estimating that going to college costs €7,500 a year, excluding fees.

Saving for the family's future needs is one feature of the EBS mortgage product for second-time buyers, Next Step. EBS customers can earn a 10 per cent bonus on savings after five years, with reasons for saving including "education, special occasions such as weddings, or that all-important helping hand to acquire their first home", according to the brochure.

"The savings angle is not something we would have traditionally put side-by-side with mortgages," says Mr Kevin Johnson, head of residential mortgages business at EBS. "Next Step is aimed at the 35 to 45-year-old bracket. They're moving house, they have youngish kids up to the early teens," he says.

Saving for future deposits for children is a "growing trend", Mr Johnson adds. But not every parent can afford to set aside money every month to help their children avoid pouring "dead money" into monthly rental agreements year after year.

Releasing equity from the value of their home may be the only realistic option and, even then, the risks attached mean it's not like handing over some extra pocket money.

Before the property boom, parents probably thought they would be setting aside more funds for their own retirement by the time their children were pushing 30, not still financing them. But, as Mr Pat Farrell at EBS concludes: "Your kids are always your kids."