A helping hand from your parents might get you into the market faster… but if it’s not set up properly, it can create financial headaches and family tension later on.
With property prices still high and lending criteria tighter than ever, the 'Bank of Mum and Dad' has become one of Australia’s biggest lenders. But mixing family and finance needs careful handling.
There are three main ways parents help their adult kids buy property:
1. Gifting a deposit
It sounds simple, but it’s not as casual as transferring money into your account. Lenders will usually require a statutory declaration confirming it’s a genuine gift, not a loan. Without it, they may treat it as a debt and reduce your borrowing capacity. And without clear conversations now, family members might later disagree on what a ‘gift’ really meant.
2. Providing a loan
A family loan can work well — but only if it’s formalised. That means clear terms, agreed repayment schedules, and a plan for what happens if circumstances change. Without this, you risk damaging both finances and relationships. We always recommend involving a solicitor to document it properly.
3. Acting as a guarantor
This can increase your borrowing capacity and help avoid Lenders Mortgage Insurance (LMI). But it also means your parents are putting their own property on the line. If you default, their asset is at risk. Both parties should get independent legal advice and fully understand the implications before signing.
We also talk to families about the bigger picture: how today’s support might affect your ability to buy again later, or how it could impact your parents’ retirement and estate planning. And how might your siblings feel about the whole arrangement with Mum and Dad?
All important things to consider.
If your parents want to help, that’s wonderful. Just don’t wing it. Get the structure right from the start, protect everyone involved, and have open conversations before any money moves. Professional advice isn’t just a safeguard… it’s the difference between a generous gift and a future problem.
Rebecca Morgan — My Mortgage Concierge
Rebecca helps families navigate the financial and emotional side of buying property — from first homes to complex family arrangements. She makes sure the numbers work, the risks are understood, and the relationships stay strong.
Thinking about buying with parental help?
📞 Call Rebecca on 02 8014 4443 or visit mymortgageconcierge.com.au
