“Dad, how much deposit will I need to buy a house?”

This is Bailey, my 13-year-old. He’s already more house-savvy than most adults I know. He scrolls realestate.com like it’s TikTok, spots new listings in our area before I do, and talks about buying a house all the time.

The other day he asked me:
“Dad, how much deposit will I need to save when I want to buy a house?”

It’s a big question and one that thousands of young Australians (and their parents) are asking right now. With property prices continuing to climb, getting a foothold in the market feels tougher than ever. By 2035, the average house in Melbourne could be nudging $1.6 million, a huge figure to wrap your head around, especially for young people just starting out.

A Look Back My First Property Step

When I think back to my own journey, things were very different. About 25 years ago, I bought my first property in Patterson Lakes with my brother for $117,000.

Buying together made sense, it was a way to get into the market when I couldn’t do it on my own. Five years later, we sold, and that gave us both the deposit we needed to buy our own homes.

That stepping stone approach worked for us then. But today, the numbers are bigger, the savings hurdle higher, and the challenge very real for the next generation including my own kids.

The 5th Bank – Bank of Mum and Dad

We’ve all heard of the Big 4 banks in Australia… but there’s a 5th bank making a huge difference for young buyers: the Bank of Mum and Dad.

It might sound like a throwaway phrase, but it’s now one of the largest sources of funding for first-home buyers. The Australian Financial Review recently showed how a $100,000 parental gift early on can create a $1.4 million difference in lifetime wealth. That’s the kind of head start that changes everything.

But here’s the reality: not every parent has $100k sitting around, and not every family is in a position to hand over cash.

Helping Without Handing Over Cash: The Guarantor Loan

One of the smartest ways parents can help without physically handing over money is through a parental guarantor loan.

This works by using the equity in a parent’s home as security for part of their child’s loan. Here’s why it’s powerful:

• The child doesn’t need a full 20% deposit.
• Parents don’t give away any money, they’re simply backing the loan with equity.
• And most importantly: it reduces or removes Lenders Mortgage Insurance (LMI), saving thousands upfront.

A Real Example

Let’s say Bailey, down the track, wants to buy a $600,000 property.

• He’s saved $60,000 (a 10% deposit).
• Normally, he’d need to borrow $540,000. Because his deposit is under 20%, the bank would charge LMI  often $15,000–$20,000.

But if I offer a guarantee secured against our home, the LMI is waived.

• He saves thousands right away.
• He gets into the market sooner.
• And no money actually changes hands.

The guarantee can later be released once the property grows in value or the loan is paid down.

The Advantage Is Real

So, is the Bank of Mum and Dad really an advantage?
Absolutely. When used wisely:

• A gift can supercharge deposits and change long-term wealth outcomes.
• A guarantor loan can help kids into the market sooner, with less cost, and no money handed over.

For first-home buyers who feel locked out, it can be the helping hand that makes all the difference.

My Takeaway as a Parent and Broker

I don’t know exactly what the property market will look like in 2035 when Bailey and his brother are ready to buy but I do know this:

• Teaching them financial literacy, money management, and the value of saving is critical.
• And knowing the strategies available, like guarantor loans, gives parents and young buyers the tools to take control rather than feeling shut out.

Because sometimes the smartest move isn’t just with the Big 4 banks… it’s with the one sitting at your own family dinner table.

And yes, I get it,  whether we should help our kids financially or let them figure it out on their own is a debate for another day. But one thing’s for sure: the earlier we start the conversation, the better prepared they’ll be.

If you’ve got young adult kids and you’re curious about what deposit they might need or how you could help them into a home, let’s chat. From guarantee loans to siblings buying together, there are smart ways to structure finance and set them up for success.

Josh Bartlett

Director – Mynt Financial

Want to explore options? Josh@myntfinancial.com.au