Gifted Deposit Home Loans
Family help with a deposit is common and entirely acceptable to lenders. What is not acceptable is a lender being unsure whether the money is a gift or a loan, because a loan is a debt they have to assess. Most of the work here is proving which one it is.
Why lenders care about the source
A lender assessing your application needs to know two things about every dollar of your deposit: where it came from, and whether anyone expects it back. If the money is repayable, it is a liability, and it reduces the amount you can borrow in exactly the same way a car loan does.
There is also an anti-money-laundering dimension. Lenders are obliged to understand the source of funds, which is why a large deposit landing in your account a fortnight before settlement attracts questions that the same amount saved over two years does not.
What a gift does and does not solve
A gift solves a deposit problem. Enough of one takes you to 20 per cent and removes lenders mortgage insurance entirely. A partial gift reduces the premium rather than removing it, which is still worth having.
What a gift does not do is change your borrowing capacity. That is set by your income, your existing commitments and the lender's assessment rate, and no amount of family help lifts it. Estimate your borrowing power.
What a gift letter needs to say
Most lenders provide a template. The content is fairly consistent even where the wording is not.
Full name and relationship to you. Most lenders expect an immediate family member, commonly a parent.
The exact amount, matching what actually lands in your account.
An explicit statement that the money is a gift, is unconditional and is not repayable.
Confirmation the giver retains no claim over, or interest in, the property being purchased.
By every giver. Where the money comes from a couple, most lenders want both signatures.
Bank statements showing the funds leaving their account and arriving in yours, with matching amounts and dates.
Gifts and the genuine savings rule
Many lenders want to see part of the deposit accumulated by you over three to six months, which they call genuine savings. It is used as evidence that you can consistently set money aside. A gift, by definition, is not savings you accumulated.
How much this matters depends on the lender and on your loan-to-value ratio. Some lenders waive genuine savings requirements at lower ratios. Some accept a documented rental history as a substitute, on the reasoning that paying rent on time demonstrates much the same thing. Some require five per cent genuine savings regardless of the gift.
This is one of the clearer cases where comparing lenders changes the outcome rather than just the rate.
Timing matters more than people expect
Where the choice exists, having the gift in your account earlier is better than later. Funds that have been sitting in your account for several months attract fewer questions, are easier to evidence, and in some cases begin to satisfy a lender's requirements in their own right.
A transfer arriving days before settlement is not a problem in itself, but it is the version most likely to generate last-minute requests for documents at the point when you have the least time to produce them. If family help is coming, moving it early is one of the easier things to get right.
Things worth thinking about before the money moves
Is it really a gift?
Families often intend something in between: a gift now, with a vague expectation of repayment later, or a share of the property. A lender cannot work with that ambiguity, and neither, in truth, can a family. The document you sign says it is unconditional and not repayable. If that is not what everyone means, the honest options are a formal loan, which the lender will assess as a debt, or a different structure such as co-ownership or a guarantee.
Relationship breakdown
If you are buying with a partner and the gift comes from one side of the family, it is worth taking legal advice about how that money would be treated if the relationship ended. A financial agreement is a conversation to have with a family lawyer, not a broker, and it is much easier to have before settlement than after.
The giver's own position
Money given away is money not available later. Where the giver is retired or approaching retirement, gifting can affect their own financial position and, in some circumstances, their Centrelink assessment. Those rules are administered by Services Australia and are worth checking directly or with a financial adviser before a large sum moves.
Tax
Australia does not have a general gift tax, but circumstances vary and there can be consequences depending on where the money comes from, particularly if it is released from a trust, a company or overseas. This page is not tax advice. Anyone giving a substantial sum should speak to their accountant first.
Where lender policy differs
Who counts as an acceptable giver, whether genuine savings are still required alongside a gift, whether rental history can substitute for savings, how long funds must be held before settlement, and whether gifts are accepted at all above certain loan-to-value ratios.
Policy on overseas gifts is a particular variable: some lenders accept them with additional documentation, others are considerably more restrictive. If the money is coming from outside Australia, raise it at the start rather than midway through an application.
What we do
Work out whether a gift is the right form of help at all, or whether a guarantee would achieve more without the money leaving your family. Match you to a lender whose genuine savings and gift policies fit your actual situation. Get the letter and the evidence right the first time, so a straightforward application does not stall at the last moment.
And where a gift takes you close to but not quite over 20 per cent, model whether closing the remaining gap is worth doing. Compare all four low-deposit routes.
Put numbers on it
Deposit strategy
What the gift changes: loan size, repayments and buffer.
OpenLVR and insurance cost
How far the gift moves your loan-to-value ratio, and what that saves.
OpenCan I afford this property?
The full cash requirement at a specific price.
OpenBorrowing power
The ceiling a gift cannot lift.
OpenNSW stamp duty
First home buyer exemption and concession, at any price.
OpenGuarantor calculator
The alternative, where family would rather not part with cash.
OpenGet your free First Home Buyer Report
Tell us what you have saved and what family may contribute. You will get a written report showing where that puts you, what it saves, and what the next step is. Free, no credit check.
Common questions about gifted deposits
Do lenders accept a gifted deposit?
Most do, provided it is genuinely a gift and can be documented. The standard requirements are a signed letter from the giver confirming the money is unconditional and not repayable, and bank statements evidencing the transfer. What varies between lenders is whether they still require some genuine savings of your own alongside the gift, and how long the funds need to have been in your account.
Who can give me a gifted deposit?
Immediate family is the standard answer, most commonly parents. Some lenders accept grandparents or siblings, and policy on more distant relatives varies considerably. Gifts from friends, employers or unrelated parties are generally not accepted. If the giver is not a parent, it is worth confirming acceptability with the lender before you rely on the money.
Will a gift reduce how much I can borrow?
No, provided it is documented as a gift. A gift is not a debt, so there is no repayment to factor into serviceability. If the same money were treated as a family loan, it would be assessed as a liability and would reduce your borrowing capacity. That is precisely why lenders insist on clarity about which one it is.
How long does the money need to sit in my account?
Requirements vary. Some lenders are satisfied with a gift letter and evidence of the transfer regardless of timing. Others want funds held for a period, commonly three months, particularly where they are also applying genuine savings rules. As a practical matter, earlier is always easier: funds that have been in your account for months generate fewer questions and less last-minute document chasing.
Can my parents give me money and expect it back later?
Not while calling it a gift. The letter you all sign states the money is unconditional and not repayable, and signing that while privately intending otherwise is not a position anyone should be in. If repayment is genuinely expected, the honest structures are a documented family loan, which the lender will assess as a debt, part ownership of the property, or a guarantee where the family retains their money and pledges equity instead.
What if the gift is coming from overseas?
It can usually be done, with more documentation. Lenders generally want to trace the funds, which can mean statements from the overseas account, evidence of the transfer and sometimes translated documents. Policy differs considerably between lenders, and some are notably more restrictive than others. Raise it at the beginning of the process rather than midway through, because it affects which lenders are worth approaching.
Is a gift better than a guarantee?
They suit different families. A gift permanently transfers money and leaves the giver with no ongoing liability, which is cleaner but reduces their assets. A guarantee keeps their money where it is but creates a real obligation against their property that affects their own borrowing until it is released. Where family has equity rather than spare cash, a guarantee is usually the practical option. More on guarantor loans.
Is there tax on a gifted deposit in Australia?
Australia does not have a general gift tax, but circumstances differ and there can be consequences depending on the source of the funds, particularly where money comes from a trust, a company or overseas, or where the giver receives a government payment. This is not tax advice. Anyone giving a substantial amount should speak to their accountant, and anyone receiving a Centrelink payment should check the current rules with Services Australia.
Related reading
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A gift is straightforward when it is documented properly and awkward when it isn't. Twenty minutes covers what your lender will want and when the money should move.