How to help your kids buy a home without short-changing your retirement

Home ownership used to be a milestone. For many young Australians, it now feels like a miracle — and more parents are stepping in to help turn their dreams into a reality.

The so-called “Bank of Mum and Dad” has grown into a $35 billion force — large enough to rank among the nation’s top lenders if it were a bank.

More than six in 10 first-homebuyers receive parental help — often a gift or “informal loan” averaging more than $70,000.

Yet behind this generosity lies a growing financial strain: more than half of parents draw on savings, while others may dip into superannuation or even delay retirement to make it happen.

It’s natural to want the best for your children, but good intentions are no substitute for good planning.

With the right strategy, you can help your kids without putting your own retirement at risk.

Plan early and structure your support

The best time to plan is before your children ask for help. Too often, parents step in once house-hunting has already begun, leaving little time to prepare or build the resources needed.

Planning early can give you more control, allowing you to approach support strategically rather than reactively.

Start by setting aside small, regular contributions in a structured manner. Even modest amounts can grow significantly over time when invested in diversified, long-term savings vehicles.

For example, allocating up to $400 a month from age 35 could generate a meaningful contribution by the time your child is ready to buy. The principle is simple: Early, disciplined planning can create a buffer, while last-minute support may often mean scrambling resources or dipping into retirement savings.

Whatever the approach — family trust, managed fund or dedicated savings plan — the key is discipline, keeping money earmarked for children separate from the wealth you’ll rely on later.

Keep your money within reach

Structure is important, but flexibility is vital. Putting too much into property too soon can make it hard to adapt when life doesn’t go to plan. It’s the classic dilemma — being asset-rich but cash-poor.

Property may feel safe, tangible and familiar, but it potentially limits your options. It can be expensive to buy, slow to sell, and costly to maintain. When the unexpected happens, you can’t sell a bedroom to free up cash.

Maintaining a portion of your wealth in accessible, diversified investments can provide this flexibility. Some families might consider balancing property with other structures — such as exchange-traded funds, term deposits or investment bonds — which can offer more ready access to resources should circumstances change.

This way, you can support your children without permanently locking away funds you might need later. Because when interest rates rise or life takes a turn, having liquidity can keep your plans on track.

Think beyond the purchase price

Helping your child with a deposit is only part of the story. Stamp duty, legal fees, maintenance and insurance quickly add up, often more than parents anticipate.

One Perth couple learnt this the hard way. After giving their daughter a deposit, they found themselves covering strata fees and repairs when she lost work. What began as a helping hand soon tested their own savings and security.

Setting aside a flexible pool of savings can make this generosity more sustainable and help prepare your family for such unexpected financial setbacks.

Balance family expectations

In Perth, where the median house value sits around $840,000, helping one child into the market can take years of savings, and doing the same for each isn’t always realistic.

The challenge isn’t just financial; it’s emotional. Uneven support can create quiet tensions, despite best intentions.

Clear communication matters as much as generosity. Setting expectations from the outset helps avoid resentment and ensure the focus remains on opportunity, not rivalry, among children.

Fairness doesn’t have to mean equal dollars — some parents might support one child with a deposit and another with education or childcare costs. What matters is consistency and intent, so every decision supports your goals and strengthens family bonds.

Be generous — but be strategic

The Bank of Mum and Dad isn’t closing any time soon, but it is evolving. True support isn’t about how much parents give, but how thoughtfully it’s planned and sustained. When generosity is backed by structure and foresight, it can strengthen the family’s financial position instead of stretching it.

That’s the balance modern families are learning to strike — helping the next generation move forward, while keeping their own footing secure.

Felipe Araujo is chief executive of Generation Life