How to help your children buy a home

House key placed on the lock of the door

Homes are a huge investment in Australia. In 2022, the average house price sits at just over $1 million!

Every parent knows that early entry into the property market ensures good financial returns. But the young adults have a problem: property prices continue to grow quickly, it’s taking longer to save for a hefty deposit, and there is that unforgiving stamp duty.

Parents know the investment is worth it, so how can you help your children buy a home?

Below, Step Up shares different ways you can help your children get ahead. The key consideration for parents is to ensure your decision suits your own financial circumstances. Step Up’s financial planning team can help you make informed choices, so reach out if you need advice.

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Share your wisdom (for free!)


Your experience of purchasing property is valuable and it’s free to share with your children. There are unforeseeable costs associated with buying a property that first home buyers may be unaware of. Talk to your children about budgeting, mortgage options, stamp duty, legal costs and moving costs, and share your knowledge with them.

Discuss the costs that creep into the budget once a property is purchased – such as new paint, flooring, curtains and furniture.

There may be emergency costs such as plumbing or electrical issues that may be unpredictable and expensive. All this information will help your children navigate the process of purchasing a property.

Young adults may also need decision-making support. The real estate market can be a pressure cooker, so help your children to articulate their needs and boundaries.

White small envelope in the hands of two people

Gifting money


Often the key financial difficulty for young adults is the enormous deposit they need to save, plus the associated stamp duty. For the average house, young adults need to save over $140,000 before they can start looking at real estate. Gifting a tax-free lump sum of money to help your children may sound like the ideal solution.

But before you offer a lump sum, seek financial advice. Depending on your age, gifting money may impact your pension entitlements. Regardless of your age, a maximum of $30,000 can be gifted over a rolling period of five financial years, but must not exceed $10,000 in any one year to avoid deprivation rules.

Be aware there’s no way to reclaim the money if your child separates from their partner or has creditors chasing them later.

Senior couple talking to adviser

Loan the money


Providing a direct loan to help your children buy a home provides immediate financial support for the initial costs, but also protects you if you need to reclaim the money later. A loan should be a formal agreement that outlines a repayment schedule for your children. Parents can delay the repayment requirements and it can be reassessed at any time. Again, parents should offer loans that don’t add any additional personal financial pressure. Seek advice if you’re unsure what your limit should be.

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Be the guarantor


If you’re not keen on giving cash upfront to help your children buy a home, acting as a guarantor may suit you. Acting as a guarantor helps to secure your child’s mortgage by using your assets (including your family home or an investment property you own) as security.

The guarantee is limited to a set amount – usually up to the 20% deposit required by lending institutions. Remember, acting as a guarantor will impact your borrowing ability as banks will assess it as a liability. You cannot use your super and very few institutions will use shares as security in a limited parental guarantee.

Before you dive into this option, seek financial and legal advice; you don’t want to be stuck with a big mortgage if things go wrong. Know your children’s earnings and expenses, and ensure they have adequate personal insurance in place should an unforeseen health event occur. Only commit to a portion of the loan that suits your circumstances.

Happy smiling senior mother with adult son hugging at home

Buy in partnership


Purchasing a property in partnership with your children can be a heart-warming experience. Financially it means you are both liable for the property, on mortgage repayments and maintaining the property. In a joint purchase, your children may lose their first home buyer entitlements. It is also critical you can afford the repayments of the partnership. Investigate with a financial adviser before you decide this is a suitable option.

The Step Up team offers comprehensive services to support a broad range of client needs. The Step Up process supports clients to take control of their financial future. Get in touch and we will help you make an informed choice.

Are you ready to upgrade your money mindset?


If you’re ready to hit your financial goals and upgrade your money mindset, why not get in touch with the team at Step Up Financial?

As fully qualified, experienced financial planners, we can provide you with expert financial services, including advice on:

And we encourage your pathway based on your own individual circumstances and values.

Need more information? Get in touch with Step Up Financial


    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445