As of 1 February 2026, the landscape for the “Bank of Mum and Dad” in Australia has shifted. Under new directives from the banking regulator, APRA DTI Limits are now strictly enforced across major lenders. This means that any loan where the total debt is more than six times the borrower’s annual income is now part of a capped 20% pool of new lending.
For many first-home buyers, this “Debt-to-Income” (DTI) ceiling is a brick wall. If you were planning to help your children bridge the gap with a family loan, you need to be extremely careful. One wrong word in your documentation could see their mortgage application rejected—or worse, leave your capital unprotected in the event of a future relationship breakdown.
The “Double-Edged Sword” of Family Help
To bypass the new APRA DTI Limits, many families are instinctively turning to larger cash gifts. The logic seems simple: a gift isn’t a debt, so it doesn’t count towards the 6x income cap, right?
Technically, yes. But while a gift solves the bank’s DTI problem, it creates a massive legal vulnerability for the parents.
- The Divorce Risk: In Australia, an undocumented gift is considered a marital asset. If your child and their partner separate, your hard-earned deposit help is often split 50/50 with the ex-partner. You can read more about how a formal structure provides vital divorce protection here.
- The ATO Scrutiny: As of early 2026, the ATO has intensified its scrutiny on private wealth transfers, looking for “sweetheart deals” that aren’t properly documented.
Why “Handshake Loans” Fail the DTI Test
Lenders are now more forensic than ever. If a bank sees a large sum hit a child’s account, they will ask for a Gift Letter. If you sign that letter but secretly expect to be paid back, you are effectively asking the bank to ignore a debt—which can be seen as mortgage fraud.
Conversely, if you tell the bank it is a loan, they will add the repayments into their serviceability calculator. Under the new APRA DTI Limits, that extra debt could push your child over the 6x threshold, resulting in an automatic “No” from the bank’s computer.
The Solution: The “Subordinated” Family Loan
Smart families are using Chipkie to structure family support as a Subordinated Loan. This is a specific type of agreement that banks often look upon more favourably than a commercial debt.
By using a professional platform like Chipkie, you can document the money as a loan that is:
- Subordinated to the bank: Meaning the bank gets paid first if things go south.
- Flexible on repayments: You can set the agreement so that no repayments are due until a certain date or event (like the sale of the house).
- Legally Protected: Unlike a gift, it remains a debt on the child’s “balance sheet” for legal purposes, meaning it is protected from a child’s future divorce or bankruptcy.
🛡️ Navigate the 2026 Rules with Chipkie
The new APRA DTI Limits aren’t just a hurdle for the kids; they are a risk for parents. Don’t let a “simple gift” become a permanent loss. Whether you are paying off HECS debt to boost their borrowing power or providing a direct deposit loan, you need a structure that satisfies the bank while protecting your family’s future.
Use Chipkie to formalise your family loan today. It’s the only way to stay below the DTI cap while keeping your money safe.
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Disclaimer
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial, legal, or tax advice. APRA lending rules and bank policies are subject to change. We always recommend consulting with a qualified mortgage broker and solicitor before making any financial decisions.
