Buying a House With Your Parents: The 2026 Guide
Buying with a parent is not a joint loan with an older co-borrower. Four things change that do not apply to any other pairing: the term the lender will write, the government schemes you lose, what happens to your parents’ pension, and what your siblings inherit.
The short answer
There are three different arrangements people call buying with your parents, and choosing between them is the whole decision. As guarantor, your parents provide security over their own property but are not on your title and do not make repayments. As co-borrower, they are on the loan and each of you is liable for the entire debt. As co-owner, they are on the title with a defined share. Four consequences apply only to a parent arrangement: a lender may shorten the loan term because of your parents’ age and ask for an exit strategy, a parent on the loan or title can disqualify you from first home buyer schemes and duty concessions, the arrangement can affect an Age Pension through the assets test, and your parents’ share forms part of their estate, which is a conversation about your siblings.
Three ways parents can help, and they are not the same
These get used interchangeably in conversation and they are entirely different in law, in risk and in what they do to your application.
| Guarantor | Co-borrower | Co-owner | |
|---|---|---|---|
| On the loan? | No. They guarantee part of it | Yes, jointly and severally liable for all of it | Usually yes, alongside being on title |
| On the title? | No | Not necessarily | Yes, with a defined share |
| Do they make repayments? | No, unless you default | Legally they can be required to pay all of it | By agreement, and the lender can pursue them |
| What is at risk | The guaranteed portion, secured against their home | Their income, credit file and any security given | Their capital in the property, plus loan liability |
| Their borrowing capacity | Reduced by the guaranteed amount | Consumed by the whole loan | Consumed by the whole loan |
| Can it be unwound? | Yes, released once equity reaches the required level | Only by refinance or sale | Only by transfer, refinance or sale |
The last row is the one people underweight. A guarantee is designed to end. Once the loan has been paid down or the property has risen enough, the guarantee can be released and your parents are out. Co-borrowing and co-ownership have no natural end point. They finish when someone refinances or the property sells, and both of those require someone to qualify on their own.
A guarantee is a door your parents can walk back out of. Being on the loan or the title is not.
For many families the guarantee is the right answer and the other two are being considered by default. Our guarantor home loan page covers how a guarantee is structured, what it is limited to, and how it is released.
The age problem, and the exit strategy question
This is the structural difference between buying with a parent and buying with anyone else, and it catches families completely unprepared.
Lenders assess whether a loan can be serviced across its full term. When a borrower will reach retirement age partway through, the lender needs to understand how the loan will be repaid once employment income stops. That assessment produces two possible outcomes, and both are surprises if nobody mentioned them.
The term may be shortened. Rather than 30 years, the lender may write the loan over a period that ends around the older borrower’s expected retirement. A shorter term means a materially higher monthly repayment, and it is calculated on the whole loan, not on your parents’ share of it. A file that services comfortably over 30 years can fail over 15.
An exit strategy may be required. The lender may ask, in writing, how the loan will be repaid: downsizing, superannuation, sale of another asset, or the younger borrower refinancing alone. Some lenders discount or exclude income beyond a certain age. What is acceptable varies substantially between lenders, which is exactly why lender selection matters more on these files than on almost any other.
The practical consequence is that the arrangement people assume increases borrowing capacity sometimes reduces it. Adding a parent adds income, but it can also compress the term, and a shorter term over the full loan can outweigh the extra income. Run both scenarios before deciding anything, which is a point our guide on how much you can realistically borrow develops further.
What you lose the moment a parent goes on
This is the most expensive thing on this page and it is almost never raised until an application is underway.
First home buyer schemes. The federal deposit scheme has a maximum of two applicants and requires all applicants to meet the eligibility criteria, including the test that you have not held an interest in property in Australia within the relevant period. A parent who owns or has owned property does not meet that test. Put them on the application and the scheme is generally unavailable to the pair of you, which can mean losing a Lenders Mortgage Insurance saving worth many thousands of dollars. Eligibility is determined by Housing Australia and the participating lender.
Duty concessions and grants. First home buyer duty concessions and grants are administered by Revenue NSW and have their own eligibility rules about who is acquiring an interest in the property. Where a non-eligible person takes an interest, a concession can be reduced or lost. The rules are specific and they turn on who is on the title rather than who is on the loan, which is one reason the two decisions should be made separately.
The structure that preserves both. This is where the guarantee earns its place. A guarantor is not an applicant and does not take an interest in the property, so a guarantee can allow parental support without disturbing scheme or concession eligibility. Whether that holds for your circumstances is a question for the participating lender and your conveyancer, but it is the reason the guarantee route is worth pricing before the alternatives. Our first home buyer loans page covers what the schemes require.
What it does to your parents
Everything above is about your application. These are about theirs, and they are the questions parents are least likely to ask before agreeing.
- The Age Pension assets and income tests. Money or property interests transferred to help a child can affect pension entitlement, and gifting rules mean a gift is not necessarily disregarded straight away. This is a question for Services Australia or a licensed financial adviser, not for a broker, and it should be asked before anything is signed rather than after.
- Capital gains tax on their share. If your parents own a share of a property that is not their main residence, the main residence exemption may not apply to their portion when it is eventually sold or transferred. This can be a substantial and entirely avoidable cost, and it is a question for their accountant.
- Their own borrowing capacity. Whether guarantor, co-borrower or co-owner, the arrangement consumes capacity they may want later for a downsize, a renovation or another child.
- Their credit file. On a co-borrowed loan the account appears on their file and missed repayments affect them equally, for the life of the loan.
Intellect Finance holds a credit licence, not an Australian Financial Services Licence. We cannot advise on pension entitlement, retirement adequacy or whether your parents can afford to do this. Those belong with a licensed financial adviser, and the tax questions with their accountant.
Not sure whether a guarantee or a joint loan fits?
Bring your income, your parents’ position and roughly what you are buying. Fifteen minutes and you will know which of the three structures works, what the term looks like, whether it costs you scheme eligibility, and which lenders suit the file. No credit enquiry, no obligation, and no fee at any point.
The sibling conversation nobody has
The finance can be structured well and the family can still come apart, and it usually comes apart here.
If your parents put capital into a property with one child, that capital is no longer sitting in an estate to be divided evenly. Whether that is intended as an early inheritance, a loan to be repaid, or a gift to one child, it needs to be written down, because in ten or twenty years nobody will remember what was agreed at the kitchen table and the person best placed to explain it may not be there.
Two mechanics worth knowing, both of which sit with a solicitor rather than with us.
How the title is held decides who inherits your parents’ share. Held as joint tenants, a deceased owner’s share passes automatically to the surviving owner outside the will, which in a parent and child purchase means it passes to the child on the title rather than being divided among the children. Held as tenants in common, each share passes under that owner’s will. For most parent arrangements tenants in common with defined shares is the structure that keeps the estate intact, but that is a legal and estate decision. Our guide to joint home loans covers the general mechanics of both.
Get it in writing while everyone agrees. A written agreement setting out who contributed what, what happens if someone wants out, how the property is valued in that event, who pays what outgoings, and what happens if a relationship ends or someone dies. A solicitor drafts it. It costs a fraction of what a dispute costs, and its real value is that drafting it forces the conversation while everyone is still willing to have it.
How your parents get out later
Every one of these arrangements ends. Deciding how before it starts is the difference between a plan and a problem.
- Guarantee release. The cleanest exit and the reason a guarantee often beats the alternatives. Once the loan has reduced or the property has risen enough that the remaining loan sits within the lender’s requirements without the guarantee, your parents can apply to be released. It is a lender decision on the numbers at the time, not automatic, and not something anyone can promise in advance.
- You refinance alone. Requires you to service the entire loan on your own income, which is a full new application at whatever policies and rates apply then. Worth testing early whether that is plausible on your trajectory.
- You buy out their share. Where they are on title, this is a transfer of an interest, which can attract duty and may have capital gains consequences for them. Conveyancer and accountant, before anyone agrees a price.
- The property is sold. Proceeds split per the agreed shares. Simple if there is a written agreement and contested if there is not.
The question to put on the table at the start is which of those four is the plan, and what happens if it does not work. If the honest answer is that nobody knows, that is information about the arrangement rather than a detail to sort out later.
The order to do this in
- Establish whether you need them at all. Run your own capacity first. Sometimes the gap is smaller than assumed, and sometimes it is a credit limit or a small debt rather than income.
- Price the guarantee before the alternatives. It is usually the lowest-risk structure, it preserves scheme eligibility, and it has a defined exit.
- Check what a parent on the application costs you. Scheme eligibility and duty concessions, quantified, before anyone signs anything.
- Send your parents to their own advisers. A licensed financial adviser on the pension and retirement question, their accountant on capital gains, and independent legal advice. Guarantors should always take independent legal advice.
- Get the written agreement drafted. Contributions, exit, valuation method, outgoings, death, relationship breakdown.
- Then look at lenders, knowing that term policy and exit strategy requirements vary widely and that this is where lender choice does most of its work.
How Intellect Finance can help
Our part is the finance. We can tell you which of the three structures your situation actually supports, what the term is likely to look like given your parents’ age, whether a parent on the application costs you scheme eligibility, and which lenders take a workable view of exit strategy. Frequently the recommendation is a guarantee rather than the joint loan a family came in asking about, and occasionally it is that you do not need your parents at all.
What we do not do is advise on pension entitlement, on your parents’ retirement position, on tax, or on how to divide an estate. Best Interests Duty applies to a home loan for a property you will live in, so we must act in your interests and prioritise them over ours. We charge you nothing on any loan type, with no arrangement fee and no clawback recovery fee. Penrith based since 2005, holding Australian Credit Licence 390611. The residential process generally is on our home loans page.
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Frequently Asked
Buying with parents: FAQs
What families ask before committing to a structure.
Can I buy a house with my parents?
Yes, and there are three distinct ways to do it. As guarantor your parents provide security over their own property without going on your loan or title. As co-borrower they are on the loan and each of you is liable for the whole debt. As co-owner they are on the title with a defined share. They carry very different risks and very different exits, and choosing between them is the main decision.
Is it better for my parents to be guarantors or co-borrowers?
For most families a guarantee is the lower-risk structure. It limits their exposure to the guaranteed portion rather than the whole debt, keeps them off the title, and has a defined end: once the loan reduces or the property rises enough, the guarantee can be released. Co-borrowing has no natural end point and only finishes on a refinance or a sale. A guarantee also generally preserves first home buyer scheme eligibility, which a parent on the application can destroy.
Does my parents’ age affect the loan?
Yes, and this is the biggest structural difference from buying with a partner. Lenders assess whether the loan can be serviced across its full term, so where a borrower will reach retirement partway through, the term may be shortened or an exit strategy required in writing. A shorter term means higher repayments calculated on the whole loan. Adding a parent adds income but can compress the term, and the compression sometimes outweighs the income.
Will I lose my first home buyer benefits if a parent is on the loan?
Frequently yes, and it is the most expensive thing people miss. The federal deposit scheme allows a maximum of two applicants and requires all of them to meet the eligibility criteria, including not having held property within the relevant period. A parent who owns or has owned property does not meet that. Duty concessions have their own rules turning on who takes an interest in the property. A guarantee generally avoids this, because a guarantor is not an applicant. Confirm your position with the participating lender and your conveyancer.
Will helping me affect my parents’ pension?
It can. Money or property interests transferred to help a child may affect Age Pension entitlement under the assets and income tests, and gifting rules mean a gift is not necessarily disregarded immediately. This is a question for Services Australia or a licensed financial adviser, and it should be asked before anything is signed. Intellect Finance holds a credit licence, not a financial services licence, and cannot advise on it.
Will my parents pay capital gains tax on their share?
Possibly. Where parents own a share of a property that is not their main residence, the main residence exemption may not apply to their portion when it is sold or transferred. That can be a substantial cost and it is entirely foreseeable. It is a question for their accountant or registered tax agent before the structure is settled, not after.
How should the title be held if I buy with a parent?
That is a legal and estate decision for your solicitor, but the mechanics matter. Held as joint tenants, a deceased owner’s share passes automatically to the surviving owner outside the will, which in a parent and child purchase means it goes to the child on the title rather than being divided among the children. Held as tenants in common, each share passes under that owner’s will. For most parent arrangements tenants in common with defined shares is what keeps the estate intact.
How do my parents get out of the arrangement later?
Four routes. A guarantee can be released once the loan reduces or the property rises enough, subject to the lender’s assessment at the time. You refinance alone, which requires you to service the whole loan on your own income. You buy out their share, which where they are on title is a transfer that can attract duty and capital gains consequences. Or the property is sold. Decide which is the plan before you start, because if nobody knows, that is information about the arrangement.
Do we need a written agreement?
Strongly recommended, and a solicitor should draft it. It should cover who contributed what, whether any contribution is a gift or a loan, what happens if someone wants out, how the property is valued in that event, who pays outgoings, and what happens on a death or a relationship breakdown. Its real value is that drafting it forces the conversation while everyone still agrees. Guarantors should also obtain independent legal advice.
The bottom line
Most families arrive at this asking whether their parents should go on the loan, when the better question is whether they need to be on anything at all. A guarantee limits the exposure, preserves scheme eligibility, avoids the title and the estate complications entirely, and has a defined way out. It is the right answer more often than it is chosen.
Where a parent does go on, the four things that decide whether it works are all knowable in advance: what the age does to the term, what the application costs you in schemes and concessions, what it does to their pension and their tax, and what your siblings understand about it. Every one of those is cheaper to answer now than to discover later, and three of them are not broker questions at all.
Joseph Sukkar
Joe founded Intellect Finance in Penrith in 2005 and has more than 25 years in Australian finance. Family-assisted purchases are a regular part of the firm’s residential work across Western Sydney, and the practice briefs the parents as carefully as the buyer. Intellect Finance holds a credit licence rather than a financial services licence, is not a registered tax agent, and charges clients no fee on any loan type. More about the team.
Sources
Housing Australia, Home Guarantee Scheme eligibility, including the applicant limit and the property ownership test. housingaustralia.gov.au
Revenue NSW, First Home Buyers Assistance Scheme and transfer duty, for concession eligibility where more than one person acquires an interest. revenue.nsw.gov.au
Services Australia, Age Pension assets and income tests and gifting rules. servicesaustralia.gov.au
ASIC Moneysmart, guidance on going guarantor on a loan and the risks involved. moneysmart.gov.au
Important disclosures, general advice warning and licensing
General information only. This article is general information only and does not constitute financial, credit, taxation, legal, estate planning or social security advice. It does not take anyone’s personal circumstances into account and is not a recommendation to enter into any arrangement.
Guarantors should obtain independent legal advice. A guarantee is a serious commitment secured against your parents’ own property, and it puts that property at risk if the loan is not repaid. Anyone considering guaranteeing a loan should obtain independent legal advice before signing, and lenders commonly require it. Release of a guarantee is a lender decision made on the circumstances at the time and cannot be promised in advance by any broker.
Pension and social security. How an arrangement affects Age Pension entitlement under the assets and income tests, and how gifting rules apply, are matters for Services Australia or a licensed financial adviser. Intellect Finance Pty Ltd holds an Australian Credit Licence, not an Australian Financial Services Licence, and cannot advise on pension entitlement, retirement adequacy or whether your parents can afford to assist.
Tax and estate matters. Capital gains treatment of a parent’s share, the main residence exemption, duty on a later transfer of an interest, and the estate consequences of how title is held are matters for a registered tax agent and a solicitor. Intellect Finance is not a registered tax agent or a law firm. How title is held has consequences that outlast the loan and should be decided with legal advice.
Scheme and concession eligibility. Eligibility for the Home Guarantee Scheme is determined by Housing Australia and the participating lender. Duty concessions and grants are determined by Revenue NSW. Rules, caps and thresholds are set by government and change from time to time. This page quotes no threshold figures. Confirm your position directly before anyone signs anything.
Lender policy varies and changes. Maximum loan terms, treatment of borrower age, exit strategy requirements, income treatment beyond a certain age, guarantee structures and release criteria are set by individual lenders, differ substantially between them, and change without notice. Descriptions of common practice here are general observations rather than any lender’s policy. No broker can guarantee approval, a term, a structure, a guarantee release or a timeframe.
Joint and several liability. Where two or more people are borrowers on a loan, each is liable for the entire debt rather than a proportional share, and that does not change if the family relationship does. Missed repayments affect every borrower’s credit file.
Best Interests Duty. A home loan for a property you will live in is regulated consumer credit under the National Consumer Credit Protection Act 2009, and Best Interests Duty applies. It does not apply to business or commercial lending.
What we charge you. Nothing, on any loan type. No arrangement fee for residential, commercial, corporate, asset, SMSF or personal lending, no fee for complex or specialist lending, and no clawback recovery fee if a loan is discharged early. Lenders pay us a commission on settlement, disclosed to you in writing in our Credit Guide before we provide credit assistance.
About the reviews shown. The reviews displayed on this page are genuine reviews published by clients on Intellect Finance’s Google Business Profile, shown live via a third-party reviews widget. They reflect those individuals’ own experiences and are not a promise of any particular outcome.
Intellect Finance Pty Ltd holds Australian Credit Licence 390611 and is a member of the MFAA and AFCA. Lending criteria, fees and terms apply. Article checked 7 September 2026.
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Get the structure right first.
Bring your income, your parents’ position and roughly what you are buying. We will tell you which of the three structures your situation supports, what your parents’ age does to the term, whether putting them on the application costs you scheme eligibility, and which lenders take a workable view. If the answer is a guarantee rather than a joint loan, or that you do not need them at all, that is what you will hear. Penrith based since 2005. No fee on any loan type. ACL 390611, not an AFSL.
General information only, not financial, tax, legal or social security advice. Guarantors should obtain independent legal advice. Pension questions belong with Services Australia or a licensed adviser. Intellect Finance holds a credit licence, not an AFSL.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member