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More than a fifth of Gen Z home buyers are relying on cash gifts from family to save enough for mortgage deposits, as house prices continue to break records.
The “bank of mum and dad” continues to be one of the key funding sources for prospective home buyers, with 22 per cent of Gen Z (those aged 18-28) funding their home loan deposit with a cash gift from family, according to major brokerage Mortgage Choice.
The findings come in the latest Mortgage Choice Home Loan Report, a quarterly release that combines Mortgage Choice submission data and a consumer survey (the latest report involved a survey of 1,000 Australians conducted in April 2025 by Honeycomb Strategy).
It found that while there was a strong desire for home ownership and most were relying on their own savings to fund a home loan deposit, many home buyers needed support to get onto the property ladder.
Young adults were found to want the most support – with 29 per cent of Gen Z saying they would borrow the funds and a similar proportion stating they would use the First Home Guarantee Scheme.
Gen Z also had the highest proportion of respondents stating they were accessing the First Home Guarantee Scheme (25 per cent) and accepting a cash gift from their family (22 per cent).
Mortgage Choice CEO Anthony Waldron noted that rising property prices meant housing accessibility had been squeezed.
“As property prices have reached new record highs, getting into the market has become harder, so we asked survey respondents how they were doing it,” he said.
“We found that more than a fifth of Gen Z respondents were funding their home loan deposit with a cash gift from family, making the bank of mum and dad one of the largest lenders in the country.”
Waldron flagged property in Sydney as particularly inaccessible to purchase: “Our brokers tell us that many first home buyers can’t afford to buy in Sydney without a cash gift, and those gifts range in value from $10,000 to as much as $500,000.”
The report found that Gen Z were also the most likely to say they would invest extra cash towards purchasing their first property. When asked how they would invest $100,000, thirty-nine per cent of Gen Z said they would put it towards their first property.
Overall, more than half of respondents who were not yet property owners said they would put a $100,000 investment towards buying their first home or an investment property.
Rate cuts ease mortgage pressure
While saving for deposits is a challenge, the start of the rate easing cycle is driving an uptick in buyer optimism, with one-third of consumers reporting that current interest rates had made them more confident to buy property.
By comparison, a year ago, 63 per cent of survey respondents said interest rates were adversely impacting their confidence.
Households are also feeling less financial pressure, Mortgage Choice found, with fewer borrowers making sacrifices to keep up with their home loan repayments compared to a year ago.
Mortgage Choice home loan submission data revealed an uplift in first home buyer activity over the March quarter, with the number of loans rising 5.6 per cent and the value of loans increasing 12.3 per cent year on year.
Waldron said the property market had “changed significantly” in the last year.
“Inflation has reduced from its previous highs, and home loan interest rates have started to fall,” he said.
“With home loan interest rates expected to fall further over 2025, I’d encourage borrowers who haven’t reviewed their home loan in more than a year to chat to their broker to ensure they’re still on a competitive rate.”
Lenders and economists widely expect the central bank to lower interest rates when it next meets in May, potentially providing more relief to borrowers.
Refi rise continues
Refinancing activity rose over the March quarter, Mortgage Choice found, with the value of refinance loans up 30 per cent year on year.
Refinancing activity was highest in South Australia/Northern Territory, where the value of refinancing loans rose 44.3 per cent year on year.
Commenting on the trend, Waldron said: “It’s unsurprising that refinance activity continues to grow given the Reserve Bank delivered a 25-basis point cut to the cash rate in February. If the RBA lowers the cash rate again at its May board meeting, we’re likely to see refinancing activity continue into the June quarter.”
Recent research from Equifax found a similar pattern, with a “refinancing frenzy” driving up consumer mortgage applications.
[Related: First home buyers increasingly turning to brokers: Helia]
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