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Parent assist home loans

A parent assist home loan can help you get into the market with no deposit, and without risking your parents’ house.

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In the past, lenders offered 100% no deposit home loans. Following the global financial crisis, these 100% home loan products disappeared, leaving guarantor loans as the only way to buy a home with no deposit. But one Australian lender has a product that might help: the parent assist home loan. It is a unique mortgage product that allows parents to lend the deposit amount to their child, so they can buy a home without a deposit.

What is the Parent Assist Home Loan?

The Parent Assist Home Loan is offered through one Australian lender, Bluebay Home Loans. It allows parents to lend their children from 5% up to 20% of the purchase price of a house. The rest of the purchase price is supplied by the lender in the form of a traditional home loan.

The parental loan is managed by a third party lender, with interest calculated at half the rate of the home loan. This enables first home buyers to buy a home, without a deposit. If parents lend 20% of the property’s purchase price, buyers can also avoid paying for lenders mortgage insurance (LMI).

How does it differ from a guarantor loan?

The Parent Assist Home Loan is different to a guarantor home loan, because parents don’t have to offer their own home as security for the child's loan.

Confused? Here's how it works: a guarantor home loan usually allows parents to use the equity in their home as security for their child’s home loan. While this can allow buyers to purchase a home without a deposit and potentially avoid LMI, it can also put their parents’ home at risk, because the parental home is offered as security on the loan. If the child defaults on the loan, the lender can seek recourse from the parents, who could even be forced to sell their family home to repay the loan.

By contrast, the Parent Assist Home Loan is structured as a loan from parent to child. Parents don’t have to use their home as security against their child's new home purchase, and they also don't have to be on the title of your home. Because the product is offered as a legally binding loan, parents can be certain they'll recoup the money they lend. The loan has the added benefit of generating a return for parents.

Find a guarantor home loan now

How do I pay it back?

The Parent Assist Home Loan is repaid like a regular home loan, but your parents’ portion of the loan is repaid when you sell your home or refinance your mortgage.

You can also choose to repay your parents when you’ve built up enough equity in your home.

Also, if you make extra repayments on your home loan, the extra funds will be applied to your parents’ portion of the loan first.

Can my parents gift my deposit?

A parental loan could enable you to enter the property market much sooner than if you had to save a deposit, but couldn’t your parents just give you the money for your deposit without the expectation of repaying it?

While your parents can gift funds to you for your deposit, lenders generally require you to have some genuine savings of your own. The minimum amount for genuine savings is usually 5%. So even if your parents are willing to give you obligation-free funds for your home loan deposit, you’ll still have to save 5% yourself.

The Parent Assist Home Loan enables you to purchase with no genuine savings, and no deposit funds of your own.

Learn more about saving a deposit for a home

Can my parents just purchase part of the property?

Another alternative to guarantor loans is co-owning a house with your parents. In this arrangement, your parents could buy part of the property and be listed on the title as tenants in common. This also enables you to buy without a deposit or genuine savings.

This differs from the Parent Assist Home Loan because having your parents listed as co-owners would make you ineligible for any First Home Owner Grants (FHOGs) offered in your state or territory. With the Parent Assist Home Loan, you could still be eligible for the FHOG, depending on the price of the home you’re purchasing.

How do I get a Parent Assist Home Loan?

The Parent Assist Home Loan is only offered through Bluebay Home Loans. You can apply through their website.

Compare some cheap home loan options below

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Name Product Comparison Rate Fees Monthly Payment

Ubank Neat Variable Home Loan
Principal & interestOwner-occupier40% min. deposit
Principal & interestOwner-occupier40% min. deposit
Interest Rate
2.64%
2.65%
  • Application: $0
  • Ongoing: $0 p.a.
$605
Get flexibility and the option to make unlimited extra repayments with this variable rate loan.

Unloan Variable Home Loan
Principal & interestOwner-occupier20% min. deposit Refinancers only
Principal & interestOwner-occupier20% min. deposit Refinancers only
Interest Rate
2.64%
2.56%
  • Application: $0
  • Ongoing: $0 p.a.
$605
A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.

Nano Variable Home Loans
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.74%
2.74%
  • Application: $0
  • Ongoing: $0 p.a.
$613
Competitive rate with zero fees, fast approval and a 100% free offset account. Available for refinancers and existing buyers purchasing their next home. 20% deposit required.

loans.com.au Smart Booster Discount Variable Home Loan
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.60%
2.96%
  • Application: $0
  • Ongoing: $0 p.a.
$602
Get a low discounted variable rate loan. Requires a 20% deposit. Get your loan processed fast and settle within 30 days.

Macquarie Bank Basic Home Loan
Principal & interestOwner-occupier40% min. deposit
Principal & interestOwner-occupier40% min. deposit
Interest Rate
2.84%
2.84%
  • Application: $0
  • Ongoing: $0 p.a.
$621
This flexible variable rate loan requires a 40% deposit or equity. Get fast online approval and $0 application fee and $0 ongoing fees.

IMB Budget Home Loan
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.84%
2.85%
  • Application: $449
  • Ongoing: $0 p.a.
$621
A low-rate, no-frills home loan for borrowers with a good deposit and unrestricted repayments. $0 application fee for eligible borrowers with principal-and-interest repayments and deposits of at least 20%.

HSBC Home Value Loan
Principal & interestOwner-occupier30% min. deposit
Principal & interestOwner-occupier30% min. deposit
Interest Rate
2.77%
2.78%
  • Application: $0
  • Ongoing: $0 p.a.
$616
$3,288 refinance cashback offer
This competitive variable rate loan is available for borrowers with 30% deposits. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

Ubank Neat Variable Home Loan
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.84%
2.86%
  • Application: $0
  • Ongoing: $0 p.a.
$621
A competitive variable rate loan that comes with a 100% offset account. 20% deposit required.

Yard Variable Home Loan
Principal & interestOwner-occupier40% min. deposit
Principal & interestOwner-occupier40% min. deposit
Interest Rate
2.64%
2.66%
  • Application: $0
  • Ongoing: $0 p.a.
$605
Get a low variable rate loan with this online lender. 100% offset account. Requires a 40% deposit.

Greater Bank Great Rate Discount Variable with Family Pledge Home Loan
Principal & interestOwner-occupier-10% min. deposit
Principal & interestOwner-occupier-10% min. deposit
Interest Rate
2.79%
2.80%
  • Application: $0
  • Ongoing: $0 p.a.
$617
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, QLD and ACT only.

OneTwo Variable Rate Home Loan
Principal & interestOwner-occupier20% min. deposit Refi Only
Principal & interestOwner-occupier20% min. deposit Refi Only
Interest Rate
2.59%
2.49%
  • Application: $0
  • Ongoing: $0 per month
$601
$5,000 refinance cashback.
A variable rate loan for owner-occupier refinancers living in NSW, VIC, QLD or SA metro and inner regional areas. Get an extra 0.15% off your rate as you repay the loan and get up to $2,500 in bonus payments. Terms and conditions apply.

Athena Variable Home Loan
Principal & interestOwner-occupier40% min. deposit
Principal & interestOwner-occupier40% min. deposit
Interest Rate
2.64%
2.64%
  • Application: $0
  • Ongoing: $0 p.a.
$605
Owner occupiers with 40% deposits or equity can get this competitive variable rate loan. No upfront or ongoing fees.

Tic:Toc Live in Loan Variable Rate
Principal & interestOwner-occupier10% min. deposit
Principal & interestOwner-occupier10% min. deposit
Interest Rate
2.59%
2.60%
  • Application: $0
  • Ongoing: $0 p.a.
$601
A competitive variable rate product with no application or valuation fees offered by a 100% online lender.

Unloan Variable Home Loan
Principal & interestInvestment20% min. deposit Refinancers only
Principal & interestInvestment20% min. deposit Refinancers only
Interest Rate
2.94%
2.86%
  • Application: $0
  • Ongoing: $0 p.a.
$629
Investors can get a low variable rate. Apply online and get fast approval. Backed by the Commonwealth Bank.

homeloans.com.au Low Rate Home Loan with Offset
Principal & interestOwner-occupier40% min. deposit
Principal & interestOwner-occupier40% min. deposit
Interest Rate
2.64%
2.64%
  • Application: $0
  • Ongoing: $0 p.a.
$605
A competitive rate with no application or ongoing fees. This loan is not available for construction.

G&C Mutual Bank Momentum Home Loan
Principal & interestOwner-occupier40% min. deposit
Principal & interestOwner-occupier40% min. deposit
Interest Rate
2.74%
2.76%
  • Application: $0
  • Ongoing: $0 p.a.
$613
A variable rate loan for owner-occupiers looking to refinance. This loan has low fees and a 100% offset account.

Well Money Balanced Variable
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.60%
2.63%
  • Application: $250
  • Ongoing: $0 p.a.
$602
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee.

Newcastle Permanent Building Society Real Deal Home Loan
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.87%
2.91%
  • Application: $595
  • Ongoing: $0 p.a.
$624
This variable rate loan requires a 20% deposit and has an offset account.

Nano Variable Home Loans
Principal & interestInvestment20% min. deposit
Principal & interestInvestment20% min. deposit
Interest Rate
3.04%
3.04%
  • Application: $0
  • Ongoing: $0 p.a.
$637
Investors can get this no-fee variable rate loan. You will need a 20% deposit. Fast online approval. Available for refinancers and existing buyers purchasing their next property.

Yard Variable Home Loan
Principal & interestOwner-occupier20% min. deposit
Principal & interestOwner-occupier20% min. deposit
Interest Rate
2.74%
2.76%
  • Application: $0
  • Ongoing: $0 p.a.
$613
A competitive variable rate loan for home buyers with an optional offset account ($120 annual fee). 20% deposit required.