Bank of Mum and Dad backing almost a third of Aussie homebuyers

About 30 per cent of Aussie homebuyers - the equivalent of 1.8 million people - had a helping hand from family to get them into the property market, showing the hefty importance of the Bank of Mum and Dad to the still-costly sector.

Finder’s 2026 Home Loan Report found contributions toward a deposit were the most common type of help, reported by 11 per cent of people.

Eight per cent said their family paid for their home outright.

Six per cent said a family member was guarantor on their home loan, and 5 per cent said their family paid for their entire deposit.

Another 5 per cent received help with ongoing mortgage repayments, while 3 per cent were given a lump sum of cash above the deposit amount.

Report author Richard Whitten, home loans expert at Finder, said family wealth was playing a growing role in determining who can buy property, and when.

It matches reports from the housing sector following the federal budget’s tax changes in recent months, which have shown that despite the market falling enough to scare off investors, it remains too expensive for many first-home buyers.

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However, Finder’s report did show 70 per cent of people say they’d received no outside help.

“The Bank of Mum and Dad has become a major player in Australia’s housing market,” Whitten said.

“For buyers with family backing, that support can cut years off the journey to homeownership and put them well ahead financially from the start.

“But for those without that extra level of support, saving a deposit on top of rent and day-to-day costs can be one of the toughest hurdles to clear.”

Whitten said family assistance was not the only pathway to homeownership, but buyers should understand all the options available.

“Government support schemes, low-deposit loans and comparing home loan rates can all help reduce the upfront cost of buying a property,” he said.

Whitten said whether you’re giving or receiving help to buy a home, it was important to have a clear understanding of what that support means.

“Is it a gift, a loan, or an ownership arrangement?” he said.

“Having those conversations upfront can help avoid financial and family disputes down the track.”

Over 300,000 first homebuyers now risk being stuck in ‘mortgage prison’

More than 300,000 Australians have now purchased their first property using the federal government’s five per cent deposit scheme – but the affordable path to home ownership comes with a quiet catch.

A surge of young people who used the scheme to break into the competitive property market did not need to save for a 20 per cent deposit, with banks also waiving the pricey Lenders Mortgage Insurance (LMI).

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However, mortgage brokers warn this scheme may have backfired for some buyers after watching the property market’s radical price correction.

According to FinSavvy director and co-founder Sina Enayati, borrowers who were approved for a mortgage using a deposit less than the traditional 20 per cent could be trapped with their lender for years.

Many banks and lenders approving or refinancing a mortgage where the loan versus equity (LVR) is above 80 per cent will ask for Lenders Mortgage Insurance (LMI).

Only participating lenders allow refinancing under the scheme, which would again waive LMI.

If a borrower wants to switch to a non-participating lender with a competitive rate, they will lose the benefit of the scheme.

“If a buyer is only going in with a five per cent deposit, if market goes down, they’ve lost money, but it’s also kind of trapping them into that mortgage,” Enayati said.

“And there is [the problem of] lenders’ mortgage insurance, so that’s a trap.

“You can still refinance out, yes. However, it [may] come with an insurance expense, which means it wouldn’t be worthwhile.”

LMI is typically about one and five per cent of a loan’s total amount.

Research from Canstar found that, for an average property valued at $600,000 and a loan term of up to 30 years, a borrower would pay about $31,008 in LMI.

Enayati said thousands of buyers who purchased a home using the scheme are now essentially mortgage prisoners, with conditions attached to refinancing if rate increases strike.

Economists from Commonwealth Bank, ANZ and NAB forecast a rate hike in November, which would raise the cash rate by 0.25 percentage points to 4.60 per cent.