Gifted Deposit Home Loans: Genuine Savings, Gift Letters and the Rules

Gifted Deposit Home Loans: Genuine Savings, Gift Letters and the Rules

Yes, your parents can gift you a house deposit, and most lenders will accept it. The money has to be a true gift rather than a loan, documented in a signed gift letter or statutory declaration, and you still have to show you can afford the repayments. The complication is genuine savings: borrow above 90% of the property’s value and most lenders also want to see money you saved yourself, or a rental ledger in its place.

This guide covers what a gifted deposit is, where the genuine savings test applies, what counts as genuine savings, what the gift letter must say, who can give the gift, how a gift works with the Australian Government 5% Deposit Scheme, and when a family guarantee is the better route. It draws on our 25+ years of arranging loans across a panel of 52+ lenders.

What is a gifted deposit?

A gifted deposit is money a family member gives you towards buying a home, with no expectation of repayment and no claim on the property. Parents are the usual source. The gift can cover part of the deposit or all of it, and it can also cover purchase costs such as stamp duty and legal fees.

Lenders treat a gift differently from money you saved, for one reason: it tells them nothing about how you manage money. A deposit built up over a year shows a lender you can live below your income, which is the same discipline a mortgage needs. A lump sum from your parents doesn’t. That is why genuine savings rules exist, and why the whole question comes down to how much you’re borrowing against the property’s value, the loan-to-value ratio (LVR).

The gift also has to be exactly that. If the money has to be paid back, the lender counts it as a debt and the repayments go into your serviceability assessment. Calling a loan a gift to get the application through is a misrepresentation to the lender, so be clear with your family about which one it is before anything is signed.

Gifted deposit versus genuine savings: where the test bites

Genuine savings is money you accumulated and held yourself, usually over at least three months. Most lenders apply the genuine savings test only when the loan is above 90% of the property’s value, measured on the base LVR before any lenders mortgage insurance (LMI) premium is added to the loan. Two lenders on our panel apply the test above 85%, and a small number of specialist and near-prime lenders don’t require genuine savings at all.

In practice that gives you three bands:

• At or below 80% LVR. A fully gifted deposit is generally fine. No LMI, no genuine savings test, and the widest choice of lenders.
• Above 80% and up to 90% LVR. A gifted deposit is still accepted at most lenders, but LMI applies unless you qualify for a waiver, and the lender looks more closely at your spending and account conduct.
• Above 90% LVR. Most lenders want genuine savings alongside the gift: 5% of the purchase price, held or built up over three months, or a rental ledger in its place. The test starts above 90% at most lenders and above 85% at one. The ledger usually needs to cover six months, a few lenders accept three, and one non-bank lender doesn’t accept rental history at all. On a fully gifted deposit with no savings and no ledger, most lenders stop at 90% LVR. Around five lenders on our panel go to 95% or more, because they either count a non-repayable family gift as genuine savings or don’t require genuine savings at all.

Here is how that plays out on a $700,000 purchase. A $70,000 gift leaves a $630,000 loan at 90% LVR: at most lenders no genuine savings test, but LMI applies. A $35,000 gift means borrowing 95%, which puts you inside the genuine savings test at most lenders. A $140,000 gift brings the loan to 80% and removes both the test and the LMI premium, which is why the size of the gift matters more than where it came from.

Professional LMI waivers are a separate case. Some waiver packages are written for genuine savings only and don’t accept a gifted deposit, so check the waiver’s conditions before you count on both. Our LMI waivers guide covers who qualifies.

What counts as genuine savings?

The three-month holding period is the standard. Money that has been in an account in your name for three months, or built up through regular deposits over that time, is the core of genuine savings at almost every lender. No lender on our panel stretches the period to six months. Outside savings accounts, term deposits and shares held for three months, equity in a property you already own, a First Home Super Saver release and the proceeds of a property sale count at most lenders. A bonus or tax refund held for three months counts at some lenders and not others. Beyond that the list varies from lender to lender, which is one reason to have the deposit checked before you apply rather than after a decline.

Rent as genuine savings

A number of lenders accept a rental ledger from a licensed real estate agent, usually covering six months, in place of a savings history. It’s mostly offered to first home buyers buying a home to live in. The logic is the same as savings: six months of rent paid on time shows you can carry a regular housing cost.

We’ve also had a lender ask for evidence that borrowers with no savings were paying rent, to see where their money was going each month. If you can’t show savings, show rent paid on time, or extra repayments on another loan. Either one strengthens a file built on a gift.

Gifts that count as genuine savings

Brokers have said “park the gift in your account for three months first” for years, and in practice it still works. Lenders assess genuine savings from your last three months of bank statements. If the gift arrived before that window opens, the statements show a balance held steadily for three months, which is what the genuine savings test asks for, and lenders generally accept it. A few lenders on our panel write a three-month holding rule for gifts into their policy. Where a lender’s policy says gifted money is not genuine savings, that applies to a gift received inside the three-month statement window. A couple of smaller lenders count a non-repayable gift from immediate family as genuine savings with no holding period at all. Since September 2026 one major bank has gone further: it now counts gifted and inherited funds as genuine savings without any holding period. Two conditions apply. The money must be in your account when the application is submitted, shown on a bank statement. You also complete the bank’s own declaration: the amount, the date you received it, the giver’s name and relationship to you, the type of contribution, and that the funds are not refundable. A separate gift letter from the giver is still normal practice. For a buyer whose deposit came from family last week, that one policy change can be the difference between applying now and waiting a quarter.

The gift letter or statutory declaration: what it must say

Lenders want the gift documented before formal approval. The usual form is a gift letter signed by the giver. Two lenders on our panel want it as a statutory declaration, witnessed by a Justice of the Peace or another authorised witness, two more insist on their own template, and several don’t specify a form at all, so we confirm the format before the giver signs anything. Whatever the form, it needs to state:

• the full name of the person giving the money and their relationship to you
• your full name as the recipient
• the amount of the gift
• the date it was transferred, or will be transferred
• that the gift is unconditional and non-repayable, with no interest charged
• that the giver has no interest in or claim over the property
• the giver’s signature and the date, plus a witness where the lender requires one.

The lender will usually also want to see the money. A bank statement showing the transfer into your account is standard. Only one lender on our panel also asks for the giver’s bank statement in its written policy, and then only where it doubts the gift is genuine. The gift doesn’t have to be in your account on the day you apply at every lender, though one major bank wants it there at submission. Most lenders need to see it before formal approval, so transfer it early rather than in settlement week.

Three things undo gifted deposits more than anything else: calling a loan a gift, quietly repaying the gift after settlement, and a giver who expects a share of the property later. If your parents want their name on the title or a share of the sale proceeds, that is a different arrangement and needs its own legal documents, not a gift letter.

Who can give a gifted deposit?

Parents are by far the most common givers, and grandparents and siblings are generally accepted too. Gifts from friends or more distant relatives are where lenders split. Around seven lenders on our panel restrict gifts to immediate family, usually parents, grandparents, siblings and children. One accepts a gift from a friend in its written policy, and around ten say nothing about the relationship, which means a check with the lender before you apply rather than an assumption. A few specialist lenders don’t require genuine savings at all, so the relationship matters less there. The old rule of thumb, that a lender wants to see a reason the person would give you money and never want it back, still holds.

A gift from overseas can be used, but it takes longer to evidence. Expect to show the giver’s bank statements, the international transfer, and certified translations if the records aren’t in English, and allow time for the money to land in an Australian account before the application goes in. No lender on our panel declines an overseas gift outright, though two spell out extra evidence rules for it.

Two points for the person giving the money. First, tax: the ATO lists gifts from relatives given out of love among the amounts you don’t declare as income, so neither side pays income tax on the gift itself. Parents who sell shares or property to raise it may face capital gains tax on the sale. Second, Centrelink: if the giver receives the Age Pension or another payment with an assets test, Services Australia counts gifts above its gifting limits. The limits are $10,000 in a financial year and $30,000 over five financial years, and anything above them still counts towards the giver’s income and assets tests for five years. It doesn’t stop the gift, but it can reduce the giver’s payment, so a parent on a pension should check before transferring a large sum.

Can you borrow your deposit instead?

Not as genuine savings. No lender on our panel counts borrowed money, including a personal loan taken out to fund the deposit, as genuine savings, and several decline a borrowed deposit outright. At least one major bank will accept a loan from family or friends as funds to complete the purchase, but only on a loan that doesn’t need lenders mortgage insurance, with the family loan’s repayment counted in your serviceability. One lender accepts equity drawn from a property you already own as a deposit but not a personal loan.

The practical difference between a gift and a family loan is large. A $70,000 gift reduces the loan you need. A $70,000 family loan sits in your liabilities and reduces how much the lender will give you. If buying with nothing saved is the real question, our guide to borrowing 100% of the purchase price sets out the routes that exist.

Gifted deposits and the 5% Deposit Scheme

The Australian Government 5% Deposit Scheme lets eligible first home buyers borrow with a minimum 5% deposit, or 2% for eligible single parents and legal guardians, with the Government guaranteeing part of the loan so no LMI is charged. There are no income caps and no place limits, but there are property price caps by location. You must be an Australian citizen or permanent resident, at least 18, and not have owned property in Australia in the last 10 years, and you must buy a home to live in with a principal-and-interest loan from a participating lender.

On the deposit itself the Scheme’s Information Guide (1 July 2026 edition) says three things that matter for gifts:

• your deposit must be at least 5% and less than 20% of the property value
• you must use as much of your savings as possible for the deposit, under your lender’s policies
• you must not restructure your finances to fit, and the guide’s own example is transferring cash or assets to another person to get under the 20% line.

The guide doesn’t say whether the 5% can be gifted. That is left to each participating lender’s credit policy, and it varies. Two of the Scheme lenders on our panel accept a fully gifted 5% deposit: one major bank, which counts a non-repayable gift as genuine savings on its own declaration form, and one specialist lender that doesn’t require genuine savings. The rest want the 5% genuinely saved whatever the LVR, or a rental ledger alongside the gift, and at least one requires it held for three months. So unless you are placed with one of those two, plan on showing genuine savings or a rental ledger alongside the gift. The upside is pricing: we’ve had buyers borrowing around 91% who kept a competitive rate purely because they qualified for the Scheme, where a standard loan at that LVR would have been priced much higher. Our 5% Deposit Scheme NSW guide covers the price caps and the application steps.

Gift versus family guarantee

If your parents can help, a gift is one option. The other is a family guarantee, where they offer their own property as additional security for part of your loan instead of handing over cash. Each suits a different family.

A guarantee does two things at once: it removes LMI and it unlocks the lower rates lenders reserve for loans at 80% or below. It also narrows the field, because fewer lenders offer it, and one lender on our panel still asks for 5% genuine savings or six months of clean rental history even with a guarantee in place. What usually settles a nervous parent is the cap: the guarantee covers a slice of the loan, not the whole amount. The guarantor isn’t assessed on their income either, so a retired parent with clean credit can still do it at at least one lender. Our guarantor home loan guide walks through the structure and the release.

Some families do both: a gift that gets the loan under 90% so the genuine savings test doesn’t apply, and no guarantee at all. Others gift nothing and guarantee 20%. The right mix depends on whether your parents would rather part with cash or carry a contingent liability for a few years.

How much deposit do you still need?

A gift changes where the deposit comes from, not how much you need. On a $750,000 purchase, 5% is $37,500, 10% is $75,000 and 20% is $150,000, and on top of the deposit you need stamp duty (unless you qualify for a first home buyer exemption), legal costs and lender fees. Above 80% LVR add LMI, unless the loan is Scheme-backed or you hold a waiver.

The plan turns on how much your family can give, whether you have any genuine savings or a rental history to sit beside it, and whether the combination gets you under 90%, under 80%, or neither. Our guide to how much deposit you need to buy a property covers the costs line by line.

Frequently asked questions

Can my parents gift me a house deposit?

Yes. Most lenders accept a gifted deposit from parents, as long as it is a genuine, non-repayable gift documented in a signed gift letter or statutory declaration and you can service the loan. Above 90% LVR most lenders also want genuine savings or a rental ledger alongside the gift.

Does a gifted deposit count as genuine savings?

Not when it has just arrived, but it does once it has been held. Genuine savings means money held in your name for at least three months, and lenders check that against your last three months of statements. A gift that has sat in your account for the full three months is generally accepted as genuine savings. A gift received inside that window usually is not, unless the lender is one of the few with no holding period. Since September 2026 one major bank counts gifted and inherited funds as genuine savings with no holding period, provided the funds are in your account at submission and you complete the bank’s declaration about where they came from.

What does a gift letter for a home loan need to say?

The giver’s full name and relationship to you, your name, the amount, the date of the transfer, a statement that the gift is unconditional and non-repayable with no interest charged, a statement that the giver has no interest in the property, and the giver’s signature. Some lenders require it as a statutory declaration or on their own template, and most want a bank statement showing the funds.

Can I use a gifted deposit with the 5% Deposit Scheme?

It depends on the participating lender. The Scheme requires a deposit of at least 5% and less than 20% and says you must use as much of your own savings as possible, but it leaves the question of gifted funds to each lender’s credit policy. At least one participating lender requires 5% genuine savings on Scheme loans; others follow their standard genuine savings rules.

Can I borrow money for a house deposit?

Not as genuine savings. No lender on our panel counts a borrowed deposit as genuine savings, and several decline borrowed deposits outright. At least one major bank accepts a loan from family as funds to complete on a loan that doesn’t need lenders mortgage insurance, with the family loan’s repayments counted against your borrowing capacity.

Is a gifted house deposit taxed in Australia?

No. The ATO treats gifts from relatives given out of love as amounts you don’t declare as income, so there is no income tax on the gift for you or the giver. If the giver receives the Age Pension, Services Australia still counts gifts above $10,000 in a financial year or $30,000 over five years towards their income and assets tests for five years, which can affect their payment.

Talk to us about a gifted deposit

A gift from family can bring a purchase forward by years, but the lender that suits a fully gifted deposit at 90% LVR is not always the one that suits a Scheme application or a family guarantee. We work across a panel of 52+ lenders, check which ones fit the way your deposit is made up, and get the gift letter right before the application goes in. Speak to our mortgage brokers about your deposit.

This article contains general information only and does not constitute financial advice. Your personal financial situation, objectives and needs have not been considered. Before acting on any information, you should consider its appropriateness to your circumstances. Speak to a qualified mortgage broker for advice tailored to your situation. Mortgage World Australia Pty Ltd is a credit representative (CR No. 396946) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Patrick O'Brien

Patrick is a Director and a Home Loan Specialist. He has been helping Australians with home loans since 2001. Prior to working as a mortgage broker Patrick was employed by Macquarie Bank for 3 years and also worked as an accountant for a publicly listed company. Patrick’s qualifications include:

Bachelor of Business, UTS Sydney. Majored in accounting and sub-majored in Finance and Marketing.
Diploma of Finance and Mortgage Broking Management FNS50310
Certificate IV in Financial Services (Finance/Mortgage Broking) FNS40804