Using an inheritance to buy a home
An inheritance changes what you can buy, and it arrives tangled in things that have nothing to do with property: an estate, a timeline you don't control, sometimes a house owned three ways with your siblings. Here is how lenders actually treat inherited money, and how to structure a purchase around it.
Inheritance as your deposit
Lenders accept inherited funds as a deposit, the question is how much evidence travels with the money. Expect to show where it came from: a letter from the estate's solicitor or executor, a copy of the distribution statement, and the bank trail from the estate to your account. That paper trail is not suspicion, it is standard verification, and having it ready is the difference between a smooth approval and weeks of back-and-forth.
The wrinkle is genuine savings. At low deposits, many lenders want to see part of the deposit saved by you over time, and an inheritance, like a gift, does not automatically qualify on arrival. Money that has sat in your account for a few months typically converts to seasoned funds, and some lenders will accept a rental history as a substitute. Which rule applies depends on the lender, which is exactly the selection work a broker does before anything is lodged.
Buying before the estate settles
Estates take time. Probate, asset sales and distribution can run many months, and the property you want to buy may not wait. What a lender will do with an expected inheritance is limited: an amount that has not been distributed generally cannot be counted as your deposit, however certain it feels. What can be done is planning, verifying your borrowing position now, structuring the purchase so the timing works, and in some situations using other levers, existing equity or a guarantor arrangement, to move first with the inheritance clearing the bridge later.
If you are selling an inherited property and buying with the proceeds, the sequencing questions are the same as any sell-and-buy, with an estate's timetable added. A long settlement negotiated on the purchase is often the simplest tool available.
Inheriting a share of a property
The most common hard case: a home left to two or three siblings, and one of you wants to keep it.
How a buyout works
Keeping an inherited home means buying out the other beneficiaries: a new loan in your name pays each sibling their share of the agreed value, and the title transfers to you. The lender assesses it like any purchase, your income against the loan, the property's value against the debt, with one advantage: your inherited share acts like a deposit already in the property. Inheriting a third of a home means you may only need to fund two thirds.
Agree the value first
Most family disputes here are really valuation disputes. An independent valuation, agreed by everyone before the finance starts, keeps the conversation about numbers instead of memories. The estate's solicitor documents the arrangement; we make sure the lending is approved against it before anyone commits.
Duty and tax, briefly
Transfers between beneficiaries of an estate can have different transfer duty treatment from an ordinary purchase, and inherited property can carry capital gains consequences later. Both are your solicitor's and accountant's territory, not ours, and both are worth a conversation before the buyout figure is settled, because they change what the transaction really costs.
When the numbers don't reach
If one income cannot carry the buyout loan, the honest options are the same levers as any stretched purchase: a longer term, a different lender's assessment of the same income, family support through a guarantee, or agreeing to sell instead. Knowing which of those is realistic, before mediation of the estate hardens positions, is worth a twenty-minute conversation.
Inheritance on the way, purchase in mind?
Charles can map the timing, the evidence lenders will ask for and what you could borrow, before the estate settles.
Inheritance and home loan questions
Do lenders accept an inheritance as a house deposit?
Yes, with evidence of the source: typically a letter or statement from the estate's solicitor or executor and the bank trail showing the funds arriving. At low deposit levels, genuine savings rules can also apply, which may mean holding the funds for a period or choosing a lender whose policy accepts inherited money as it stands.
Can I borrow against an inheritance I haven't received yet?
Generally no, an undistributed inheritance is not yours to pledge, and lenders will not count it as a deposit. What you can do is plan the purchase around the estate's timetable, or use other resources, equity or a guarantor, to move sooner, with the inheritance restructuring the loan when it arrives.
I inherited a house with my siblings and want to keep it. What loan do I need?
A buyout works as a purchase-and-refinance in one: a new loan in your name pays your siblings their agreed shares and the title transfers to you. Your inherited share counts like equity already in the property, which usually makes the deposit side straightforward, the assessment then turns on whether your income services the loan.
Does an inheritance count as genuine savings?
Not automatically. Where genuine savings rules apply, usually deposits under 10 to 15 per cent, an inheritance is treated like a lump sum: some lenders want it held for a period first, some accept a rent history instead, and some have no requirement at all. The genuine savings guide covers the detail.
Is there stamp duty on inheriting a property in NSW?
Transfers under a will are treated differently from ordinary purchases, and buyouts between beneficiaries can also have their own duty treatment depending on how they are structured. The specifics belong with your solicitor, and they are worth confirming before the buyout price is agreed, because duty changes the real cost.
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General information only, not credit, legal, tax or financial advice. Estate, duty and tax outcomes depend on your circumstances, confirm them with your solicitor and accountant. All lending is subject to individual assessment and approval.
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