Bank of Mum and Dad the fifth biggest home loan lender - report 2017

Mozo research has found that the “Bank of Mum and Dad” is now the fifth biggest lender in Australia, as young home-buyers turn to their parents for help getting into a red hot property market.

In 1986, the average house price was $76,278 - 4.4 times the average income of $17,321 per year. Thirty years later, in 2016, the average price tag on a house had risen to $547,714, a hefty 6.9 times the average income of $78,832.

With house prices rising out of step with income growth, many young Aussies looking to buy their first home have to be very resourceful when it comes to their finances, according to Mozo Director Kirsty Lamont.

“Housing affordability is a mounting problem in many areas of Australia, and it’s getting harder and harder for new buyers to enter the market,” says Lamont.

“This has lead to the rise of mum and dad as a lender - parents who are helping their kids to purchase a property by contributing to the deposit, helping to meet home loan repayments or in some cases even buying the property on their children's behalf.”

Read on for the full research findings.


  • The Bank of Mum and Dad has lent $65.3 billion to young Aussie home buyers - making it the fifth biggest lender in the country
  • 29% of Aussie parents assist children in buying a home, lending more than $64,000 per family on average
  • 67% don’t expect to be repaid for their contribution

Key findings: Home loan lending becoming a family affair

Mum and Dad vs the Big 4

Mozo’s research reveals that parents have lent out a whopping $65.3 billion in order to help young buyers break into an increasingly competitive property market. Around 1.02 million, or 29%, of families have offered financial assistance to children attempting to buy their first home, lending out an average of $64,206 per family.

That makes the Bank of Mum and Dad the fifth biggest lender in Australia, behind the big four banks, ANZ, CBA, NAB and Westpac, but ahead of other major Macquarie, and smaller lenders like ING and Suncorp.

How parents are financially assisting first home-buyers

When it came to how parents were helping young buyers, letting kids live at home rent free while saving a deposit was the most popular route, opted for by 43% of respondents. Directly contributing to the deposit was close behind, favoured by 41% of parents.

“Saving up a home loan deposit is a major cost when buying property, so it's no wonder that some of the more popular forms of assistance have to do with helping children save more effectively, or helping out with a lump sum towards the deposit,” said Lamont.

Types of parental assistance to first home-buyers

It’s perhaps no coincidence that the less popular options were also some of the most expensive for parents. Buying a property on behalf of or as a partner with a child was the most financially taxing - pricing in at $231,750 and $155,762 respectively - and were each favoured by only 9% of people.

Assisting with repayments, also only favoured by 9% of parents, carried an average price tag of $31,711. On the other hand, allowing kids to live at home rent-free required less financial outlay, at an average of $25,441 - but might cost parents more in patience, adds Lamont.

State by state there were only minor differences in the types of assistance offered by parents. 

Types of financial assistance by state

Where is the money coming from?

Parents are finding the money to help their children out in a number of different ways. Chief among them is by dipping into their own savings, a method favoured by two-thirds of respondents.

Less popular strategies include delaying retirement and selling off other assets.

Source of parental financial assistance

Repayment expectations

Unlike other lenders in the market, the majority of parents who shell out their hard-earned to get their children into a home don’t expect to be paid back. What’s more, even those who are expecting to be paid back don’t expect any interest to be paid on top.

Do you expect to be repaid?

Lamont says this could save buyers thousands of dollars in the long run, by allowing them to lower their loan to value ratio.

“The bigger the deposit you have, the less you have to borrow from a bank and pay interest on. Plus, if parents can help a buyer reach the 20% deposit mark, that eliminates the cost of Lender’s Mortgage Insurance, which can be tens of thousands of dollars.”

State by state breakdown of financial contributions

Taking a closer look at where these generous parents are located reveals that NSW families pony up the most dough to help out first home buyers, followed by Victorians and South Australians.

“Parents in NSW lend around $88,250 per family and Victorians around $63,000, which could reflect the fact that the Sydney and Melbourne property markets are still the biggest property hubs in Australia,” explains Lamont.

On the other end of the scale, families in the Northern Territory lend an average of just $15,000 - not necessarily a marker of less love, says Lamont, but likely a result of a less competitive housing market in the region.

Financial contribution by state

How did we crunch the numbers

This data was the result of a nationally representative survey of 1002 Australians aged 18 years and above, conducted by Pureprofile between 6 - 12 June 2017. Respondents were asked about assistance they have provided to purchase a property.

Please note that numbers have been rounded.

ABS 3236.0 Household and Family Projections were used to find the total number of families in Australia. Home loan figures were sourced from APRA Monthly Banking Statistics June 2017 and house price calculations were sourced from here.

For media enquires, please contact Gemma Rasmussen or Kirsty Timsans.

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