Helping your kids buy their home without derailing retirement

In a tight housing market, it is natural to want to help the next generation into a place of their own, whether that is an inner city unit or a starter home closer to the coast.

The key is doing it in a way that supports their goals without putting your own retirement plans, income or security at risk.​

Before deciding how to help, it is worth stepping back and looking at your overall financial position. Understanding what you need for your later years first can make it easier to choose the right style and level of support.​

1. Review your own position first

Start by checking whether you can comfortably afford to help. Consider:​

• Your expected retirement income from superannuation, investments and any Age Pension entitlements
• Your current and likely future living costs, including rates, insurance and health care
• A buffer for unexpected expenses and longer life expectancy

A financial adviser can help you project these figures and stress test different scenarios, such as living longer than expected or needing extra medical support. Once you are confident that your own needs are covered, you can look at how much support fits within that safety margin.​

2. Five ways to help with a first home

There is no single “right” way to help. Many families combine more than one of the following options.​

Option 1: Contribute cash towards the deposit

A lump sum towards a deposit can make a big difference, especially when saving while renting. If you choose to make a cash gift, treat it as money you will not need back and keep the amount within what your retirement plan can comfortably absorb. Clear communication about expectations helps avoid misunderstandings later.​

Option 2: Provide a family loan

If you prefer to keep the option of being repaid, a loan can be an alternative to a gift. This could be interest free or on a low interest basis, depending on what works for you. For clarity and to protect everyone, it is important to document the loan in writing, setting out the amount, any interest, the repayment terms and what happens if circumstances change. A solicitor can assist with preparing a simple loan agreement.​

Option 3: Act as a guarantor

Some parents choose to guarantee part of their child’s home loan so the child can borrow more or avoid Lenders Mortgage Insurance (LMI), which usually applies when borrowing more than 80% of a property’s value. As a guarantor, your own home or another property you own is often used as security for the guaranteed portion of the loan.​

This can be powerful help, but it carries real responsibility. If your child cannot keep up the loan repayments, the lender can ask you to make them, and in a serious default could ultimately sell the property used as security, including your own home. Understanding the risks, the guarantee limit and any exit pathway before signing is essential and needs tailored legal and financial advice.​

Option 4: Buy together and share ownership

If you have strong equity in your own home or other assets, some lenders may approve you and your child as joint borrowers and owners on a new property. This can help your child qualify for a loan and gives you both a share in any capital growth.​

Co ownership arrangements should be carefully documented. A formal agreement can outline who pays what share of the deposit, repayments and ongoing costs, how decisions about the property will be made, and what happens if one party wants to sell or circumstances change. Good documentation helps protect relationships as well as finances.​

Option 5: Offer practical, non cash support

Even if direct financial support is not realistic, there are still meaningful ways to help. Examples include:​

• Letting adult children live at home for a period while they save, with a clear plan for how that saving will work
• Helping compare home loans, understand features and complete paperwork
• Assisting with research into First Home Owner Grants and stamp duty concessions they may be eligible for in their state or territory

These forms of support can shorten the time it takes to save a deposit and improve the chances of choosing a suitable property and loan.​

3. Understand the Centrelink gifting and loan rules

If you receive a full or part Age Pension, or expect to in future, it is important to understand how gifts and loans are treated. Under current rules, you can generally gift up to $10,000 in a financial year, capped at $30,000 over a rolling five year period, without the extra amount being counted as a “deprived asset”.​

Any amount above those limits is still treated as your asset for five years when Centrelink applies its assets and deeming rules, which can reduce your pension. Loans to your children are also counted as assets for pension purposes and are subject to deeming, even if you are not currently receiving repayments. These settings can have a noticeable impact on your income, so are worth factoring into your decision. If in doubt, seek advice or contact Centrelink for clarification.​

4. Keep family relationships on steady footing

Money and family can be a sensitive mix, particularly if you have more than one child or if partners are involved. To reduce the risk of tension:

• Be clear about whether support is a gift, a loan, or a guarantee
• Consider how to treat siblings fairly over time, whether through similar help or through your estate plans
• Communicate openly so expectations are understood on all sides

It can also help to think through the emotional side of providing support. Rather than buying a property outright, some parents prefer to contribute in a way that still encourages their children to save, budget and manage repayments. This approach can build confidence and money skills that benefit them long after the first home purchase.​

5. Get advice before committing

Helping your children into the property market can be deeply rewarding, especially when done in a way that keeps everyone’s future secure. Because arrangements like guarantees, loans and co ownership have both financial and legal consequences, it is usually worth getting advice before signing or transferring funds.​

A financial adviser can help you test different options against your retirement needs, Centrelink position and overall wealth plan, while a solicitor can make sure any agreements are clearly documented. This combination can give you and your children greater confidence about the path you choose.​

If you would like to discuss how this applies to you, please reach out to our friendly team at Stream Financial.