Parents lend billions to children, but rarely clarify the terms
Australian families have lent about $35 billion to adult children but rarely document whether money is a gift or loan.
The 'bank of mum and dad' is estimated to be worth about $35 billion in Australia. If it were an actual bank, it would rank between the fifth and ninth largest mortgage lender.
A University of Newcastle study of 80 families found participants exchanged an average of $75,000, with amounts ranging from $5,000 to $500,000. Most participants were from Sydney.
The biggest problem: parents and adult children rarely discussed or wrote down whether the money was a loan or a gift. The status often shifted over time, a loan might become a gift if the child faced financial hardship.
Researchers found families had very different understandings of the same money, creating legal risks and relationship strain.
- $35 billion
- Total value
- 80 families
- Study size
- $75,000
- Average amount exchanged
- $5,000 to $500,000
- Range of amounts
Why it mattersUnclear terms on family loans can cause serious conflict and leave both sides with different legal expectations when circumstances change.
AustraliaMillions of Australians rely on family loans for housing; without clear agreements, many face relationship breakdown and legal confusion later.
✓ Claims checked against the source and corrected before publish. checked 8 d ago
