How To Help Your Kids Buy a Home

Here’s How to Help Your Kids Buy a Home - Without Risking Your Own Finances

Buying a home used to be a given - a natural milestone in early adulthood.

But today, for many younger Australians, it feels more like a fading dream.

When we bought our first home, it might’ve cost three times our annual income - manageable, even with a modest wage.

That same home could now be worth eight to ten times what our kids earn.

No wonder it’s becoming a family affair.

As property prices surge and the cost of living stretches already tight budgets, a growing number of families are looking to support their adult children with getting a foot on the property ladder.

But this generosity often comes with hesitation.

Parents and grandparents want to help - without compromising their own financial wellbeing, their retirement plans, or unintentionally stirring up family tension.

It’s not a matter of “should we help?” It’s about “how can help my child buy a home - but do it safely and fairly?”

With clarity, consideration and the right structure, it is possible to help - safely and sensibly.

Here’s a look at what’s making the current generation’s journey so hard, what your options are and how to make decisions that support your children and protect your future.

Why It’s So Much Harder for First-Home Buyers Today

Let’s start with the reality. The struggle isn’t a matter of poor spending habits, or splurging on avocado toast.

Fact is, the financial reality facing today’s young adults is vastly different from what it was just a generation ago.

Over the past few decades, property prices have outpaced wage growth at an alarming rate.

Saving a 20% deposit is increasingly out of reach, particularly in high-demand areas.

At the same time, soaring rent costs make it harder to save, and tougher lending criteria mean banks are less likely to be flexible with loan approvals.

Interest rates may rise and fall, but with deposit hurdles, tighter lending restrictions and a rental crisis thrown in, younger buyers often find themselves stuck - trying to save while the goalposts keep moving.

It’s no wonder parents or grandparents feel the urge to step in.

But good intentions aren’t enough.

Without a plan, it’s easy to expose yourself to risk, or worse - create friction within the family.

Four Realistic Ways to Help - And What You Need to Know About Each

There are several practical ways to support your child’s property journey.

Like anything, each comes with its own risks, benefits and emotional nuances:

1. Acting as a Guarantor

This is one of the most common forms of help - using the equity in your own home as security for your child’s loan.

No cash changes hands, but your financial footprint is now tied to theirs.

It can be powerful: it helps your child avoid Lenders Mortgage insurance and get into the market with a smaller deposit. But it’s not without risk. If your child defaults, the bank can come knocking on your door.

“It’s a high-trust option,” says Kate Barnett, Director at We Connect Property, “but also high-risk.”

“We always walk clients through what this would actually mean if things went wrong - could you absorb the debt? Would it affect your retirement or your own future lending? These aren’t hypothetical questions - they’re a stress test.

And above all, she always advises clients to treat it like any major financial decision.

“You need to understand the full implications and speak to an independent advisor before signing anything.”

Pros:

Enables your child to secure a loan without a large deposit.
Can help them avoid Lenders Mortgage Insurance (LMI)

Cons:

You're liable if your child defaults on the loan.
May affect your ability to borrow in the future.
Potential strain on family relationships if financial difficulties arise.

2. Gifting a Deposit

Sometimes the easiest help is simply giving - no strings, no repayments.

A gifted deposit avoids the complexities of shared ownership or ongoing obligations.

But it raises a few tricky questions.

First, it’s important to check how a large gift may affect your own financial position, particularly in terms of your eligibility for the Age Pension, Centrelink entitlements and estate planning.

Second, gifting money to one child can lead to resentment from others, so you’ll also need to consider how it affects everyone.

“It’s not necessarily about being equal - it’s about being transparent,” says Kate.

“Talk openly with your family. Otherwise, generosity in one direction can create tension in another.”

“Gifting is generous, but doing it without a plan can unintentionally penalise you later,”

“When one child is helped more than others, it can introduce strain,” she continues.

“That’s why it’s important to consider fairness - not necessarily financial equality, but have open, clear conversations about your intentions.”

One way is to consider staggering a gift, or setting clear expectations around its use. This can help preserve both relationships and financial stability.

Pros:

Straightforward and immediate assistance.
No ongoing financial obligations.

Cons:

Reduces your own savings and may impact your retirement plans.
Could affect your eligibility for government benefits like the Age Pension due to gifting rules.

3. Loaning the Money

A private loan offers more flexibility - you can define terms, set repayment expectations and still retain some control and protect your longer-term interests.

But too often, it’s done informally. And that’s where it goes wrong.

It’s critical that the loan is properly documented.

Why? Because if expectations aren’t documented, misunderstandings or disputes can quickly arise.

Verbal promises can quickly unravel under financial pressure. What starts out as supportive can sour relationships if expectations aren’t crystal clear.

“Helping isn’t the same as enabling,” Kate says.

“When we talk to client about how they may be able to structure a family loan, we always position it as a foundation of trust and responsibility. Clear terms don’t undermine love - they protect it.”

A legally recognised loan agreement protects both parties, clarifies boundaries and, as a bonus, may also be viewed more favourably by lenders.

Pros:

Provides assistance while maintaining some control over the funds.
Can be structured with flexible repayment terms.

Cons:

Potential for misunderstandings or disputes if terms aren't clearly defined.
May affect your child's borrowing capacity if lenders consider the loan as a liability.

4. Co-Buying a Property

Pooling resources with your child to buy a property is another growing trend.

You get more buying power, potential access to better locations, and shared responsibility - but it’s not just a bigger mortgage.

It’s technically a business partnership that comes with complex tax, legal (and sometimes emotional) implications.

From capital gains tax to future resale decisions, there’s a lot to plan for upfront.

But what happens if one party wants to sell? Or move? Who pays what, and when?

“Co-buying works best when both parties are willing to treat it like a business deal - clear terms, strategies and trust,” Kate advises.

“We’ve seen families thrive with this model, and others fail when there was no plan. It all comes down to structure.”

“But you need good legal advice, a written agreement, and an exit plan - right from the start.”

Pros:

Combines financial resources, increasing purchasing power.
Shared responsibility for mortgage repayments and property maintenance.

Cons:

Complex legal and financial arrangements.
Potential complications if one party wants to sell or exit the agreement.

5 Questions Every Parent or Grandparent Should Ask Themselves Before They Commit

Every family and financial situation is unique.

So before any money changes hands, any documents are signed, or any conversations start with a broker, it pays to pause and reflect.

These five questions can help you get clear before making a decision:

Can I genuinely afford to do this without impacting my lifestyle or retirement?

Kate often opens conversations by exploring this question.

“It’s not about whether you can access the funds - it’s about what giving them away means for your own future freedom. For instance, if markets turned, or if your child needed more support later, could you sustain it?”

Have I been completely transparent with my child - and with any other children I have - about my/our money situation?

Silence is rarely golden when it comes to financial support.

Transparency avoids assumptions and simmering tensions.

A lot of resentment doesn’t come from the act of giving,” says Kate. “It comes from the rest of the family – particularly siblings - finding out about it later.”

What happens if things go wrong and my child can’t meet their loan repayments? Could I carry that emotional and financial load?

It’s uncomfortable, but necessary. Loan defaults, relationship breakdowns or job loss can quickly affect not just finances, but also family dynamics. So having a contingency plan isn’t pessimistic - it’s wise.

Will this help teach my child financial responsibility?

Support should feel more like encouragement, not be treated like a shortcut.

Ideally, you want your child to walk into ownership confident and capable - not dependent on you to look after them.

Is this truly what’s best for them - or is this about fulfilling something in me?

Sometimes, helping can be more about our own legacy, our identity as a provider, or simply our desire to give. There’s nothing wrong with that - but it needs to be acknowledged.

It’s okay to feel conflicted. These are emotional decisions.

But thoughtful planning and being completely honest with yourself now helps avoid harder conversations and fallouts later, and stops your initial generosity turning into regret.

How to Help Without Getting Burned

While helping your child is great, it's vital to ensure your own financial security isn't compromised.

And it’s crucial to remember that helping doesn’t mean taking a blind leap of faith. You can be generous and financially savvy at the same time.

Start by having open conversations - not just with the child you’re helping, but with others in the family who may be affected - about expectations, responsibilities and potential pitfalls. Make fairness a guiding principle.

Then, seek advice.

Financial planners, property advisors and family lawyers can help you understand how your support will impact everything from pension eligibility to tax, estate planning and future lending power.

“Sometimes the hardest part isn’t the decision - it’s the discussion,” Kate says.

“When families avoid talking about money, assumptions take over. Many avoid talking about money to keep the peace. But that’s where resentment brews.”

If you’re loaning money, document it.

If you’re co-buying, get a co-ownership agreement.

If you’re gifting, consider whether it’s a standalone gesture or part of your broader estate plan.

Making clarity the priority, and formalising any arrangement prevents future disputes.

"Helping your child should be a well-thought-out decision, balancing generosity with prudence," emphasises Kate.

Why This Conversation Matters More Than Ever

As we head deeper into 2025 and beyond, we’re witnessing a shift.

Intergenerational support is no longer just a generous gesture - it’s becoming a common part of wealth transfer and financial planning in Australia.

But that doesn’t make it easy.

The rules are changing. What once worked may no longer apply.

It requires thought, boundaries, honesty… and sometimes a few tricky conversations.

But it also creates the opportunity to strengthen family ties and lay a foundation of financial independence for the next generation.

“In most cases, the real gift isn’t just the money,” says Kate. “It’s the support you’re providing.”

Yes, You Can Help You Child Buy a Home (Without Sacrificing Yours)

Kate’s message? You don’t need to choose between supporting your kids and protecting your own future.

This is about empowerment - not just for your children, but for you too!

Helping your children buy property doesn’t have to mean risking your own financial future, or causing family tension.

With the right advice, the right conversations and a clear strategy, you can be generous and wise!

Thinking about helping your kids buy their first home?

Let’s help point you in the right direction. With our extensive network of legal and financial professionals, we’ll help you find a strategy that supports your plan.

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DISCLAIMER: All recommendations made by We Connect Property are general in nature and not to be relied upon as legal or financial advice. To ensure accuracy, we always strongly recommend seeking independent, professional advice tailored to your specific situation before making any investment or financial decisions.