For many Perth families, helping your kids buy their first home feels both exciting and overwhelming. Property prices across WA have risen, lending rules are tighter than they used to be, and saving a deposit while renting can feel like an uphill battle. As a parent, it’s only natural to want to step in and help.
From my experience as a Perth mortgage broker, the key is finding a way to support your children into the property market without putting your own financial security at risk. There’s no one-size-fits-all solution, but understanding the options makes it much easier to choose the right path.
Below are the most common ways parents help their kids buy property, along with the pros and cons of each.
1. Gifting the deposit
One of the most straightforward options is gifting all or part of the deposit. This reduces how much your child needs to borrow and can help them avoid Lenders Mortgage Insurance if they reach a 20% deposit.
Pros
- Speeds up the buying process
- Reduces loan size and repayments
- No repayment pressure for your child
Cons
- Can reduce your savings or impact retirement plans
- May be treated as a shared asset if your child’s relationship breaks down
2. Loaning the deposit
Instead of gifting the funds, some parents choose to lend the money using a formal loan agreement, often with low or no interest.
Pros
- Clear structure and repayment terms
- Legal protection for both parties
- Greater peace of mind for parents
Cons
- Treated as a liability by lenders
- Can reduce your child’s borrowing capacity
3. Going guarantor
A guarantor loan allows you to use equity in your own home as additional security for your child’s loan. This can help them buy with a smaller deposit or avoid paying LMI.
Pros
- No cash contribution required
- Helps your child buy sooner
- Lower upfront costs
Cons
- You’re financially responsible if repayments aren’t met
- Your property may be at risk if things go wrong
This option can work very well when structured properly, but it needs careful advice.
4. Buying together (co-ownership)
Some parents buy a property with their child as joint owners or tenants in common, often with different ownership percentages.
Pros
- Gets your child into the market sooner
- Shared benefit from future property growth
- Flexible ownership structures
Cons
- Both parties are responsible for the mortgage
- Selling your share may trigger capital gains tax
- Can affect your own future borrowing
May make your child ineligible for first home buyer incentives, such as stamp duty concessions or the First Home Owner Grant.
5. Matching their savings
Matching what your child saves towards their deposit is a great way to encourage good financial habits.
Pros
- Builds discipline and accountability
- Encourages consistent saving
- Helps reach a deposit faster
Cons
- Requires clear expectations and boundaries
- Can still strain your finances
6. Letting them live rent-free
Allowing your child to live at home rent-free for a period can significantly speed up their savings.
Pros
- Minimal financial risk for parents
- Faster deposit growth
- Simple and flexible support option
Cons
- Higher household expenses
- Requires discipline to ensure savings aren’t spent elsewhere
Helping your kids without risking your own future
Every family’s situation is different, and there’s no single “right” way to help your children buy their first home. What matters most is understanding how each option affects your finances, their borrowing power, and their eligibility for first home buyer incentives in WA.
I often see Perth families caught out by well-meaning decisions that later limit incentives or create unexpected tax or lending issues. A short conversation with a mortgage broker before you commit can save a lot of stress down the track.
If you’re thinking about helping your child into the WA property market and want clear, practical advice tailored to your family, I’m always happy to chat. Together, we can find a way to support them into their first home while protecting your long-term financial security.
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