The Bank of Mum and Dad: Australia’s Hidden Housing Powerhouse
It’s often said that there’s nothing quite like a parent’s love unless that love comes with a $40,000 boost to help you buy your first home.
With property prices continuing to rise and saving a 20% deposit taking an average of 5.6 years, more Australians are turning to the “Bank of Mum and Dad” for support. Recent data shows that nearly one in three (29%) homeowners with a mortgage have received financial help from their parents averaging around $40,000.
But while parental support can make homeownership dreams come true, it’s not always straightforward. Let’s explore how family assistance can help first home buyers, the potential pitfalls, and other smart ways to get into the property market.
Even a Small Gift Can Make a Big Difference
Not every family can spare $40,000 and that’s perfectly fine. Even smaller contributions can go a long way toward helping first home buyers reach their deposit goals faster.
However, it’s important to plan carefully. Not every form of financial help will meet a lender’s requirements. Speaking with a mortgage broker or home loan specialist early can ensure that family contributions are structured correctly.
👉 Book a free chat to explore your best path to home ownership.
The Hidden Traps of the Bank of Mum and Dad
While parental help can be invaluable, there are some key things to watch out for:
1. Gifts must be documented
Lenders often require written proof that a financial contribution is a genuine gift — not a loan that needs to be repaid.
2. Loans from parents can affect borrowing power
If the money is provided as a loan, lenders may treat it as an informal personal loan. This could reduce your borrowing capacity.
3. Evidence of genuine savings is still required
Even with parental help, lenders want to see a savings history typically 3–6 months of consistent deposits. This demonstrates your ability to manage repayments responsibly.
Alternatives to the Bank of Mum and Dad
Not everyone can rely on parental help — and that’s okay. There are several first home buyer programs designed to make home ownership more achievable:
1. Home Guarantee Scheme (5% Deposit Program)
This government initiative allows eligible first home buyers to purchase a property with only a 5% deposit and no lenders mortgage insurance (LMI). With increased property price caps and more available places, it’s one of the best ways to get into the market sooner.
Read more about the First Home Buyer Guarantee Scheme here.
2. First Home Super Saver Scheme
This scheme lets you use your superannuation to save for a deposit faster around 30% faster than using a standard savings account. You can contribute pre-tax income into super, then withdraw it later to buy your first home.
3. Co-Buying with Family or Friends
If buying solo feels out of reach, you could co-buy a property with a sibling or close friend. Co-buying can increase your borrowing power and help share ownership costs, but always use a legal agreement to protect each person’s share and responsibilities.
Learn more about eligibility and property price caps on the official Australian Government Home Guarantee Scheme website
Protecting Both Parents and Buyers
Before parents act as the Bank of Mum and Dad, both sides should seek professional advice. Parents should:
- Speak with a financial planner to protect retirement funds.
- Get legal advice if offering a loan or guarantee.
- Use clear written agreements for transparency.
This ensures that family relationships stay strong and financial stability remains intact.
Why Expert Mortgage Advice Matters
Whether you’re relying on family help or going solo, a mortgage broker can make the process easier. We’ll help you:
- Compare the best home loan options.
- Understand how parental gifts or guarantees affect borrowing capacity.
- Access government first home buyer programs you may qualify for.
A little professional guidance can save you thousands and help you buy your first home sooner.
Talk to Us About Your First Home Loan Options
Whether you’re leaning on the Bank of Mum and Dad or exploring alternative ways to buy your first home, expert guidance can make a world of difference.
We’ll help you understand all your loan options, explain how parental gifts or guarantees affect your application, and ensure your path to home ownership is as smooth as possible.
Contact us today to discover how you could be ready to apply for your first home loan sooner than you think with or without Mum and Dad’s help.
Book a free consultation with us today and discover how you can buy your first home faster — with or without help from the Bank of Mum and Dad.
Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).