Key statistics at a glance
- The most common form of help from the Bank of Mum and Dad is a cash gift, with 20% of Australians saying their parents gave them money towards their deposit or purchase.
- More than half of first-home buyers (64%) who received financial help from the Bank of Mum and Dad did so without a formal agreement in place.
- Nearly one in three first-home buyers (31%) used the same lender as their parents or chose a home loan product their parents recommended.
- More than half of Australians with children (51%) believe parents should help their children buy a car.
How many Australians get help from the Bank of Mum and Dad to buy a home?
More than 67,000 Australians may have received some form of help from the Bank of Mum and Dad to buy a home in the past 12 months. The estimate is based on Money.com.au survey data showing 46% of first-home buyers received financial support from their parents (including living at home rent-free), applied to the 146,542 first-home buyer loans issued over the past year, according to ABS Lending Indicators data.
How can the Bank of Mum and Dad help with a home purchase?
Money.com.au's survey of more than 1,000 Australians found that the most common form of Bank of Mum and Dad assistance is a cash gift, received by 20% of first-home buyers, followed by living at home rent-free while saving for a deposit (14%).
The third most common form of Bank of Mum and Dad assistance is having parents act as guarantors on a home loan (13%).
The survey found that around 12% of first-home buyers received a cash advance or loan from their parents. However, more than half of respondents (54%) didn't receive any financial assistance.
Nick Burgess, Money.com.au’s Mortgage Expert
“The most common source of family conflict is if money provided by parents was intended as a gift or a loan. That's a distinction families should be clear on from the outset, because lenders will generally require a letter confirming whether parental financial support is being provided as a genuine gift or a loan when assessing a mortgage application. While this satisfies the lender, it doesn't protect the family because it doesn't address what happens if the property is sold, the owners separate, or if family dynamics change.”
Nick Burgess, Money.com.au’s Mortgage Expert
Estate lawyer: Read the fine print before becoming a guarantor
Kent Dalziel, Director of The Estate Lawyers
“Anyone considering acting as a guarantor for their child should read the fine print before signing. What are they potentially liable for? For example, the guarantee might not be for the loan amount only, it could also be for default interest and enforcement costs. Most guarantees do not require the bank to repossess the security, such as a car, and they can simply pursue the repayment from the guarantor.”
Kent Dalziel, Director of The Estate Lawyers
Which states rely most on the Bank of Mum and Dad?
A state-by-state analysis shows Victorian home buyers are the most likely to rely on the Bank of Mum and Dad, with more than half (52%) receiving financial support from their parents to enter the property market. One in four Victorians (25%) received a cash gift, while 17% lived rent-free with their parents to help save for a deposit.
New South Wales ranked second, with 49% of home buyers receiving financial assistance from their parents. Cash gifts were the most common form of support (21%), followed by cash advances or loans and living rent-free (both 16%), while 15% relied on their parents to act as guarantors.
South Australians (42%) and Queenslanders (40%) were less likely to receive support from the Bank of Mum and Dad, followed by Western Australians (39%).
Which generations benefit most from the Bank of Mum and Dad?
Younger Australians are the most likely to receive help from the Bank of Mum and Dad, with 78% of Gen Z first-home buyers receiving some form of financial assistance from their parents.
Gen Z are also the most likely to receive a cash advance or loan (29%), live at home rent-free while saving for a deposit (29%), and use their parents as guarantors on a home loan (22%).
Millennials follow closely behind, with 55% receiving parental assistance. They are the most likely generation to receive a cash gift from the Bank of Mum and Dad (26%) and rank second for using their parents as guarantors on a home loan (20%).
By comparison, older Australians were far less likely to receive financial assistance from their parents, with only 38% of Gen X and 25% of Baby Boomers receiving help to buy their first home.
Bank of Mum and Dad: Handshake or legal agreement?
Unlike traditional lenders, the Bank of Mum and Dad tends to operate on trust rather than paperwork. Our research found that 64% of first-home buyers who received parental assistance did so without a formal written agreement in place.
Of those, 21% said the arrangement was based on an informal 'handshake' agreement between parents and their children.
By comparison, only 36% of first-home buyers formalised the arrangement with a legally binding written agreement.
What families put in writing when using the Bank of Mum and Dad
Among first-home buyers who had a formal agreement in place, nearly half (46%) specified whether the parental contribution was a genuine gift or a loan that would need to be repaid.
Nearly two in five (39%) outlined what would happen to the parents' contribution if the buyer separated from their partner, while 23% included provisions for repaying the Bank of Mum and Dad if the property was sold.
Only 14% addressed ownership rights or equity-sharing arrangements, like whether parents who contributed funds would retain a financial interest in the property.
Money.com.au’s Mortgage Expert, Nick Burgess, says family support can be invaluable, but it's important to document the arrangement clearly from the outset.
"Property prices have become so expensive that many first-home buyers can't buy a home without the Bank of Mum and Dad. But when tens or even hundreds of thousands of dollars are being lent, gifted or secured against the family home, relying on a verbal understanding can create problems later on," he says.
“For example, I've seen family disputes emerge years after a property purchase because there was never a clear agreement about whether the deposit was intended for their child alone or for the couple jointly. Things also get complicated when parents have guaranteed part of the loan and the relationship later breaks down. In some cases, lawyers need to get involved, and what started as a generous gesture can turn sour for everyone involved."
Kent Dalziel, Director of The Estate Lawyers
“If parents are providing a loan to their child and their son or daughter-in-law, and the relationship later breaks down, the Family Court may consider that payment to be a gift rather than a loan. Essentially, to truly be considered a loan, there should be a signed loan agreement, some form of security, and regular repayments should be made. These don’t need to include interest, but the loan needs to actually be in the process of being repaid for the Family Court to treat the payment as a loan and not as a gift disguised as a loan.”
Kent Dalziel, Director of The Estate Lawyers
The growing gap between wages and borrowing fuels the rise of the Bank of Mum and Dad
The Bank of Mum and Dad has become a lifeline for many first-home buyers struggling to break into the property market.
According to the Australian Bureau of Statistics, the average first-home buyer loan has increased from $169,789 in 2002 to $614,048 today — an increase of 261% — significantly increasing the financial hurdle for Australians entering the property market.
By comparison, average annual wages have increased by around 133% over the same period, rising from $45,697 to $106,657.
What other financial decisions do Australians seek their parents' advice on?
Parents don't just help fund home purchases — they also play a significant role in many other financial decisions.
Our research found that nearly one in three Australian first-home buyers (29%) chose the same lender as their parents or a home loan product their parents recommended.
Another one in five Australians (20%) relied on their parents' advice when deciding what home to buy and where to buy it.
Beyond property, 22% sought their parents' guidance when buying a car, while 21% relied on their input when choosing health insurance.
Credit cards are the financial product least influenced by parents, with just 9% of Australians saying they relied on their parents' advice when choosing one.
More than half of respondents (52%) say that they have never made an important financial decision based on their parents' advice.
Bank of Mum and Dad extends to buying cars
Parents aren't just helping their children break into the property market. Money.com.au's research found that 41% of Australians believe parents should contribute towards the cost of their child's first car, while 8% say parents should buy the vehicle outright to help them get started.
However, just over half (51%) believe young drivers should pay for their own first car to help build financial responsibility.
Parents pay for their adult children's health insurance
Many parents continue to provide financial support well into their children's adulthood by paying for their health insurance.
Research from Money.com.au found that almost half of parents (48%) with adult children covered under their family health insurance policy pay the full premium without asking for a contribution. A further 30% say their adult children contribute towards the cost, while just 22% say their children pay the full cost of their share of the policy.
Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says there’s a trend of young Australians staying on their parents’ private health cover well into their twenties.
Chris Whitelaw, General Manager - Health Insurance
"The Bank of Mum and Dad is paying to keep them insured, which can save young adults money in the short term. The alternative is that they would forfeit cover entirely, as it can be cost-prohibitive for them to take out their own policy if they’re on a low income or just starting their career,” he says.
“But, once those adult children have a steady income, it’s time to have the conversation about contributing, even partially, to the family policy. They should also consider taking out their own cover if they earn above the Medicare Levy Surcharge threshold of $105,001 for singles, otherwise they’ll pay the surcharge through their tax.”
Chris Whitelaw, General Manager - Health Insurance
