From loans to legacies: Meet the bank that doesn’t want their money back

Key insights:

• 75% of Australian parents helping their children get on the property ladder in 2025 don’t expect to be repaid. This has doubled since Mozo last conducted this survey in 2021.
• Australian house prices have soared by 51% in five years, and a 20% deposit has increased by $66,160 over the same period.
• Parents are now gifting $74,040 on average to children to help with home loan deposits
• Worryingly, some parents are turning to high-risk credit to help their children get on the property ladder, with 3% borrowing with credit cards or loans.
• While most (67%) parents do not feel emotional pressure to say yes to their children when they ask for money, 1 in 3 admitted they would give their children ‘whatever they want.’

For years, the so-called ‘Bank of Mum and Dad’ has been Australia’s silent property giant, helping first time buyers with home loans and financial lifelines. But Mozo’s latest research shows this lender is evolving, and in fact, this ‘bank’ no longer wants their money back.

Mozo’s Bank of Mum and Dad Report 2025 reveals a significant generational shift, with 75% of the parents providing financial support towards property purchases now doing so without expecting payment. This has more than doubled since Mozo conducted the same survey in 2021, and only 33% of parents said they didn’t expect to be repaid.

“The Bank of Mum and Dad has officially evolved into the Gift of Mum and Dad," says Rachel Wastell, Mozo’s personal finance expert.

"In 2021, a third of parents helping kids onto the property ladder didn’t expect repayment but now it’s three quarters. That’s not a bank, or a loan… that’s a legacy."

Property prices up 51% in five years, and deposits surge by $66k

With house prices rising over 51% in five years, many young buyers are relying on parental support to bridge the deposit gap. Since March 2019, Australian house prices have skyrocketed from $646,000 to $976,800 by the end of 2024.

"This really shows how hard it’s become for first home buyers to climb onto the property ladder," says Wastell.

"In the past, parents might have given their kids a boost up and expected them to pay them back once they’d found their footing.”

“But now, the bottom rungs of that property ladder are gone, and parents aren’t just offering a hand, they’re building those rungs themselves, often with no expectation of being repaid."

Parents dig deeper, but at what cost?

“It’s one thing to help your kids, but using debt to do it is dangerous, parents could be trading short term generosity for long term financial concerns,” warns Wastell.

“We’re seeing some parents delay retirement, dip into savings, or even rely on credit cards and loans to support their children. Before offering that helping hand, it’s crucial to make sure you’re not relying on high interest debt and that your own financial future is secure.”

Interestingly, while more parents are giving money, fewer are willing to downsize their homes to do so. In 2025, 77% of parents said they wouldn’t consider downsizing to help financially, up from 55% in 2021, and only 3% have actually downsized compared to 14% four years ago.

“With property prices skyrocketing, it could be that many Aussie parents are ‘equity rich' and have the confidence to gift without changing their lifestyle.”

“Aussie parents are clearly generous, but in 2025 they’re drawing the line at giving up the family home, especially when that home has most likely become their biggest financial asset.”

The need to say “yes”

Mozo’s report also uncovered that a whopping 1 in 3 parents feel some sort of emotional pressure to say ‘yes’ when their children ask for financial help.

“There’s no doubt parents are stepping in where the market, and wages, have failed first time buyers, but it’s also creating emotional and financial tensions,” says Wastell.

The vast majority (83%) of parents told Mozo that all of their children receive equal financial support, regardless of whether they live nearby or interstate. However, when it comes to considering the financial repercussions of helping one child over others, opinions are varied.

Overall, most (66%) believe their children receive different support at different times and that it all “evens out” in the end, but close to 1 in 10 (9%) parents admit they reconsidered helping other children after supporting one, and 3% said they regretted giving more to a single child.

Gifted deposits won’t save buyers from high rates

Mozo warns that while parental support can get buyers through that first hurdle of housing affordability, failing to compare home loan rates could see them paying hundreds more each month than they need to.

Mozo’s analysis of ABS data  showing the mean price of residential dwellings in Australia reveals that first home buyers sticking with average variable rates could be paying over $300 more a month than those who switch to a low-cost lender.

Across Australia, where the mean property price is $976,800, that’s an extra $327 a month in repayments. In NSW, where the mean price jumps to $1,214,100, that dead money could climb to over $400 a month, for borrowers who don’t opt for a lower rate.

"A $74,000 gift is a great start, but if you settle for the average home loan rate, you could be throwing away nearly $4,000 a year in unnecessary repayments," Wastell says.

"Switching to a low-cost lender, like those recognised in the Mozo Experts Choice Awards , can slash monthly repayments by over $300. That’s real money back in your budget."

How much does it cost to buy a home in 2025?

While it’s tough for a couple, those applying for a mortgage on a single-income are really struggling. Mozo’s analysis shows that in order to afford the ABS mean residential dwelling price of $976,800, at an average home loan rate of 6.42%p.a., buyers need to manage monthly repayments of $4,898.

The situation becomes even tougher for first home buyers when you factor in the 3% serviceability buffer mandated by APRA which pushes the repayments buyers must prove they can afford to over $6,500 per month.

Taking this scenario, the data shows a solo applicant would require a minimum annual income of $149,244 to be able to afford the average home, which effectively prices out many single income earners, even those earning well above the national average. However, Wastell says there are still pathways to homeownership for those willing to think strategically.

"For single buyers, homeownership is fast becoming out of reach unless they’re earning well above the average wage, but there are still opportunities for buyers who do their homework" she says.

"Comparing home loan rates, exploring government schemes, and considering options like rent-vesting or regional areas can make homeownership achievable even in a tough market."

-ENDS-

Research notes Mozo conducted a nationally representative survey of 1,019 Australian parents 18 years and over with adult children, with information collected via Pure Profile in January 2025. This follows on from a nationally representative survey of 1007 Australians aged 18 years and above Mozo conducted via Researchify between June and July 2021.

In the 2025 survey, Mozo asked survey respondents a mix of identical questions asked in the 2021 survey - to determine the evolution of the Bank of Mum and Dad -  and new questions that were added to contextualise the findings for 2025. Where percentages in the report total greater than 100%, survey respondents were able to select more than one answer, and in some cases numbers and percentages have been rounded.

The estimated potential savings calculations included in this report were conducted using rates collected as part of the Mozo Experts Choice Awards judging process for Home Loans and the ABS Total Value of Dwelling March 2025 release.

For monthly repayment scenarios, Mozo used the scenario of a 30 year loan term, owner occupier home loan, paying principal and interest. For the minimum annual income calculations, Mozo based this on repayments for a 30 year loan at a rate of 6.42% p.a. (average variable rate in the Mozo database for an Owner Occupier paying principal and interest, with a $500k loan, 80% LVR, 23 April 2025) and a serviceability buffer of 3% p.a. plus per person household spending (ABS, Census 2021, Monthly Household Spending Indicator, January 2025).

Minimum income reflects gross income at 2024-25 resident tax rates with no Medicare levy paid.