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Saving a first-home deposit has become one of the biggest hurdles for buyers entering the property market.
While many people can comfortably service a mortgage, pulling together a sufficient deposit often takes years. That's why family support is playing an increasingly important role in helping first-home buyers get across the line.
Whether it's a cash gift from Mum and Dad or assistance using equity from a family property, a gifted deposit can make a significant difference. Understanding how these arrangements work, and what lenders expect to see, is essential before taking the next step.
A gifted deposit is money provided by a family member, usually a parent, that contributes towards your home deposit.
The key point is that a genuine gift doesn't need to be repaid.
Banks will typically ask for a gifting declaration confirming the funds are a gift rather than a loan. This helps them understand that you're not taking on additional debt obligations outside of the mortgage.
In some situations, families choose to help by leveraging equity in their own property. These arrangements can work well, but they are often more complex and may involve repayment obligations. If that's the path you're considering, it's worth getting advice early so the structure is set up correctly.
A larger deposit can improve your options in several ways.
It may allow you to:
Many buyers spend years trying to save the final portion of their deposit while property prices continue to move. Family assistance can sometimes be the difference between buying now and waiting another two or three years.
That said, the deposit is only one piece of the puzzle.
Banks will still assess your income, existing commitments, spending habits, credit history and overall ability to service the loan.
A common misconception is that the gifted money comes from the bank.
It doesn't.
The funds need to come from the family member providing the gift and be available before settlement. The bank then includes those funds as part of your overall deposit position.
This is one of the reasons documentation is important. Lenders need to clearly understand where the deposit funds have come from and whether any repayments are expected.
Helping family into a first home can be incredibly rewarding, but it should also be approached carefully.
Parents need to consider:
It's also worth having open conversations about expectations.
Most gifting arrangements are straightforward, but clear communication upfront helps avoid misunderstandings down the track.
Independent legal advice can also be valuable, particularly when large sums of money or property equity are involved.
Family support is becoming an increasingly common part of the first-home buying journey.
For some buyers, a gifted deposit can be the difference between continuing to rent and finally getting the keys to their own home.
The structure of the gift, the lender's requirements and your overall financial position all matter. Getting advice early can help ensure the support is used in the most effective way possible.
If you're wondering whether a gifted deposit could help you buy sooner, or you're a parent considering helping a child into their first home, it's worth having a conversation before making any decisions. Feel free to reach out for a chat, we’re here to help.