Family help is not a niche arrangement. It is a structural feature of the housing market.
Between 2002 and 2012, 5.8 million Australians received cash transfers from relatives, and 1.8 million received inheritances . Research using HILDA Survey data shows that receiving a parental cash transfer of more than $5,000 more than doubles the likelihood of transitioning into homeownership . Understanding the different forms of family assistance, how lenders treat each one, and the risks involved will help you have informed conversations with your family without assumptions or stigma.
- The average inheritance was $79,000 (median $25,000), and the cumulative average cash transfer reached $9,000 across multiple gifts .
- 75% of parents who help their children buy a home now provide that help as a gift with no expectation of repayment, up from 33% in 2021 .
- The average deposit gift in 2025 sits at $74,040 .
- If the "Bank of Mum and Dad" were an actual lender, it would rank between the 5th and 9th largest mortgage provider in Australia .
These are not just round numbers in a spreadsheet. Family transfers do not need to be enormous to shift outcomes. They need to arrive at the right time.
Lenders treat gifts and loans very differently
There are three main ways families help with a property purchase. Each has different implications for your loan application, your family relationships, and your financial risk.
Form | How it works | Lender treatment |
|---|---|---|
Cash gift | Parent gives you money outright, with no repayment expected | Accepted by all lenders. Requires a signed or statutory declaration confirming the money is a gift, not a loan |
Family loan | Parent lends you money with an expectation you will repay it | Most lenders treat this as an existing debt. It reduces your borrowing capacity because repayments are factored into your serviceability |
Guarantor (family security guarantee) | Parent uses equity in their own property as additional security on your loan | No cash changes hands. The parent's property is partially at risk if you default |
If a parent gives you $50,000 toward a $700,000 purchase, and you have saved $20,000 yourself, you have a total deposit of $70,000, a 10% deposit. The lender will accept this provided you can show a signed confirming the $50,000 is not repayable . You will still need to pay LMI because your deposit is under 20% (unless you qualify for a government guarantee scheme). But the gift itself does not count as a debt, so it does not reduce your borrowing capacity.
Most lenders also require you to demonstrate , typically 5% of the purchase price saved through your own efforts over at least three months . A gift can top up your deposit, but it usually cannot replace your savings history entirely.
A family loan can quietly shrink what the bank will lend you
If your parents lend you $50,000 and expect repayment, even informally, lenders will treat that as a liability. Your monthly repayments on the family loan are added to your expenses, which reduces the amount the bank will lend you.
If your family wants to help through a loan, get independent legal advice and put the terms in writing. This protects everyone, especially the family relationship.
A guarantor arrangement uses equity, not cash
A does not hand over cash. Instead, a parent offers a portion of their home equity as security against your loan. This can allow you to buy with a smaller deposit, or no deposit at all, without paying LMI .
Here is a practical example. You want to buy a $600,000 property and have saved $30,000 (5%). Your parents own a home worth $800,000 and offer $90,000 of their equity as security. The lender now treats you as having $120,000 in security, 20% of the purchase price, so you avoid LMI entirely .
The is usually limited. Your parents are only liable for the portion of the loan above 80% LVR. Once you have paid the loan down to 80% of the property value, the guarantee can be released and their property is no longer at risk .
Family help cannot fix an affordability problem
Family help can close the deposit gap. It cannot fix the monthly repayments. If your income does not support the repayments on a $600,000 loan, a $50,000 gift from your parents does not change that. Lenders assess your ability to service the loan based on your income, expenses, and existing debts, not your deposit source.
The buyers who received parental support in the Finder 2025 survey had 41% more money left in savings after buying their first home than those who did not receive help . That buffer matters. It means fewer buyers draining their accounts to zero at settlement.
But the gift only helps if the loan itself is affordable. The most useful conversation to have with family is not "how much can you give me?" It is "given what I can afford, what gap do I actually need to close?"