According to a new report by comparison website Finder, the ‘Bank of Mum and Dad’ is playing an increasingly vital role in helping young Australians achieve the dream of home ownership.

Finder’s First Home Buyer Report 2025—based on a national survey of 1,006 first home buyers—found that nearly 1 in 5 (17%) received financial assistance from their parents to save for a deposit. That’s a sharp rise from 11% in 2022.

This equates to nearly 20,000 first-home buyers each year who are getting a leg up onto the property ladder thanks to the Bank of Mum and Dad.

Craig Betalli, Senior Broker at Our Broker, acknowledges there’s always discussion around the rising cost of property and the challenges of first-time buyers entering the market. “It’s all relative,” he explains.

“Yes, prices are higher, but so are incomes—although lifestyle expectations have also increased.”

Despite these hurdles, Craig says several government schemes are helping first-home buyers get a foot on the property ladder. “Stamp duty waivers, mortgage insurance support, and even shared equity schemes—where the government takes a part-ownership stake in the property—are proving to be helpful for buyers, particularly those on lower incomes.”

However, he notes that these benefits tend to taper off once properties exceed certain thresholds, particularly in capital cities where $1 million-plus price tags are common. “For first home buyers or upgraders looking at properties over $1 million, it’s definitely more difficult.”

In these cases, family support often becomes the most viable solution. “Most banks offer products that allow a family member to provide a limited liability guarantee—typically covering up to 20% of the property value plus stamp duty,” Craig says.

“This guarantee can support a purchase for either an owner-occupied or investment property, including rentvesting if that’s the strategy.”

Family support – the pros and cons

Craig explains that family support for first home buyers can take several forms, with one of the simplest being a cash contribution.

“This kind of support helps reduce the amount the borrower needs to finance, and importantly, it can be structured so there’s no need to secure the loan against the parent’s home or investment assets,” Craig says. “It makes the transaction much simpler and less risky for everyone involved.”

However, Craig cautions that there are important considerations before taking this path to owning a first home.

“Parents need to formally declare the funds as a non-repayable gift, which means they may not see that money again,” he says.

“And in the unfortunate event of a relationship breakdown, gifted funds can be considered part of the relationship’s asset pool during any family law proceedings.”

To protect their contribution, Craig recommends that parents seek legal or financial advice before opening the safe in their personal ‘Bank of Mum and Dad’.

“There are legal structures available that can help safeguard gifted funds and reduce the risk of future complications,” he adds.

Using a family guarantee to help first home buyers

Some lenders offer loan products that allow parents or relatives to support a first home buyer (FHB) by using the equity in their own home or investment property. One popular option is a limited liability guarantee, which enables a family member to guarantee a portion of the loan—usually up to 20%—without providing cash.

For example, if an FHB is purchasing a property for $1 million and has $50,000 in savings, the guarantor could provide a limited guarantee of 20% or $200,000, helping the buyer meet the required deposit and avoid costly fees.

On the plus side, this strategy can help first-time borrowers avoid expensive Lender’s Mortgage Insurance (LMI). At the same time, the guarantor is only liable for the guaranteed portion of the loan—using the example above, $200,000 rather than the entire loan amount.

“This approach also enables buyers to retain some funds if the property requires renovations or improvements,” says Craig.

The guarantee can generally be released once the loan-to-value ratio (LVR) falls below 90%, either through the property increasing in value or the borrower paying down the loan.

If the property owner decides to sell their property in the future, the guarantee can often be transferred to a new home, depending on the lender.

Also, some lenders don’t require the guarantor to have an income or contribute actual cash—in many cases, the equity in a property is sufficient. As an added safeguard, guarantors are notified by the lender if the borrower falls behind on repayments.

However, this strategy does come with risks. The documentation can be complex, and independent legal advice is required to ensure the guarantor fully understands their obligations.

When a guarantor backs a loan using the equity in their home, the lender will register a limited mortgage over that property to secure the guarantee.

“There is always a risk,” Craig adds. “If the borrower defaults and the property is sold at a loss, the lender may call on the guarantor to cover the shortfall.”

To find out more about getting a family guarantee loan, contact Our Broker today at 1800 913 677.