How Can Parents Help Their Kids Buy a Home?
What You Can Do Now and in the Future
I’m having more and more conversations with parents who are worried about how their kids will ever afford to buy a home.
These aren’t always parents of 25-year-olds ready to buy next month. I’ve spoken with parents of teenagers — and even three-year-olds — already asking:
“What is the property market going to look like when they’re 20 or 25, and what can we do now to give them options?”
In my own client conversations, this has grown substantially over the past five to ten years. The good news is that helping your kids doesn’t have to start when they’re ready to buy. Some of the most useful things parents can do start years earlier.
The affordability gap is getting harder to ignore
Helping your child can start long before they need a mortgage
You don’t need to wait until your child is standing at an open home.
Match what they save
One idea I really like is matching part of what your child saves. You might say: “For every $1 you save towards your first home, we’ll contribute 50 cents,” or match them dollar-for-dollar up to an agreed amount. They still build the habit themselves while getting extra momentum.
Show them what time and consistency can do
Even $25 a week over 20 years adds up to $26,000 in contributions before any interest or investment return is considered.
The lesson is simple: small amounts + consistency + time can become meaningful money. Whether the funds are saved or invested is a separate financial-advice decision, but the habit itself is valuable.
Could an investment property create options for your family later?
Some parents are taking a longer view and considering an investment property while their children are young — not because they know exactly what they’ll do with it later, but because they want an asset that may create options.
That could mean using equity, selling to help with a deposit, supporting a guarantee or simply retaining it as part of their own wealth strategy.
This isn’t me saying every parent should buy an investment property for their children. It must make sense for the parents first, with borrowing, tax, cash-flow and legal implications considered. But it can be worth asking: “If our kids need help one day, what position do we want to be in?”
When they are ready to buy, work out what is actually stopping them
One of the biggest mistakes I see is assuming the problem is simply the deposit.
Sometimes it is. Sometimes borrowing capacity is the real issue. Other times, it’s both.
Before Mum and Dad offer money or their home as security, we first need to work out where the shortfall is.
1. Gift some or all of the deposit
This is currently the most common form of parent assistance I see.
A cash gift can increase the deposit and reduce the loan required, which may also help where borrowing capacity is tight. But parents should only gift money they are genuinely comfortable parting with, especially if those savings may be needed for retirement or emergencies.
2. Provide a family loan
Some parents prefer to lend rather than gift the money, with repayment happening gradually or later. But future repayment is not guaranteed. If parents need that money returned, they should think carefully and consider documenting the arrangement with legal advice.
3. Parents release equity and provide cash
Some parents borrow against their own equity and provide those funds to their child, reducing the child’s loan. But the parents are taking on the extra debt, which can affect repayments, cash flow, retirement plans and future borrowing. Using equity can be a great tool, but not at the expense of the parents’ own financial security.
4. Use a Family Guarantee
One of the biggest misconceptions I hear is that parents think they’ll be making their child’s home-loan repayments.
That’s not how it works. We still need to demonstrate that the child can afford their own repayments. The parent’s property is generally being used as additional security.
But there are real risks. If the borrower cannot repay, the guarantor may ultimately be required to repay the guaranteed amount, and an asset used as security can be at risk.
When parents are considering becoming guarantors, I like to meet with them separately from their children too. They should have space to ask: What am I risking? What happens if something goes wrong? Do I genuinely want to do this?
Helping your child should be an informed decision, not something you feel pressured into.
If you’d like to know more about what a guarantor is and how it works you can refer to our blog ‘The Role of a Guarantor in Home Buying’.
Sometimes the best solution is a combination
I recently worked with first-home buyers who were around $30,000 short of what they needed.
Their parents were willing to provide a family guarantee, but we used a combination: additional security plus a $30,000 gift funded from the parents’ equity. That reduced both the children’s loan and the guarantee required.
About a year later, the children had enough equity for us to release the guarantee and their incomes had increased. Subject to lender approval and borrowing capacity, they chose to borrow $30,000 and give it back to their parents as a thank-you. It had never been a condition of the original gift.
The best thing you can give your kids may be options
Helping your children into property doesn’t have to start with a deposit.
Teaching them to save, matching their savings, strengthening your own financial position and owning an asset that may support them later can all create options.
You don’t need to know today exactly how you’ll help your child in 10 or 20 years.
But thinking about it early can give your family far more choices than trying to solve the problem when they’re ready to sign a contract next month.
At Rockett Finance, we can help you understand the different ways parents may be able to support their children, what those options could mean for your own financial position, and how to structure things carefully when the time comes.
If you are ready to explore your options, Book an Appointment with Your Broker (that’s us!.
We’re here to help you through all stages of life (& debt), and our appointments are complimentary!
Launch what’s next.
Your Broker,
Tara
Frequently Asked Questions (FAQs)
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Parents may be able to help through a gifted deposit, a family loan, releasing equity from their own property, providing a family guarantee or, in some cases, buying property together. The right option depends on both the child’s borrowing position and the parents’ own finances.
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No. The child still needs to demonstrate that they can afford the home loan repayments themselves. A family guarantee generally involves the parent providing additional security for part of the loan. However, there are risks if the borrower cannot meet their obligations, so parents should understand exactly what they are guaranteeing before proceeding.
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Potentially. Parents may be able to borrow against available equity in their own property and use those funds to help with a child’s deposit or reduce the amount the child needs to borrow. This means the parents are taking on additional debt, so their own repayments, cash flow and future plans need to be considered carefully.
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There is no single option that is best for every family. A gift can reduce the amount the child needs to borrow, while a family guarantee may allow parents to help without giving away savings they may need later. A broker can help identify what is actually preventing the child from buying and compare the options from there.
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A larger deposit can reduce the amount your child needs to borrow, which may help if borrowing capacity is the issue. However, it does not automatically mean the loan will be approved. Income, expenses, existing debts and lender servicing requirements still matter.
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Parents should consider their own mortgage, retirement plans, emergency savings, future borrowing needs and how much risk they are comfortable taking. Helping your child into property should create opportunities for them without unnecessarily compromising your own financial security.
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RBA — Statement on Monetary Policy, August 2026 The RBA states average housing prices were around 50% higher than at the start of the pandemic, despite recent easing. https://www.rba.gov.au/publications/smp/2026/aug/economic-conditions.html
ABS — Wage Price Index, June 2026 Annual Wage Price Index growth was 3.2% in the year to June 2026. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release
Moneysmart — Ways to buy a home sooner Family help may include a cash gift or guarantor arrangement; a guarantor uses part of their own property as security and takes on financial risk. https://moneysmart.gov.au/saving/ways-to-buy-a-home-sooner
Moneysmart — Going guarantor on a loan A guarantor may have to repay the guaranteed debt if the borrower cannot. An asset used as security can be at risk. Guarantees may sometimes be limited to part of a loan. Independent legal/financial advice should be considered. https://moneysmart.gov.au/loans/going-guarantor-on-a-loan
Moneysmart — Saving Small consistent savings can build over time and compound interest can help money grow. https://moneysmart.gov.au/saving