In short: A gift letter tells the lender that deposit money from family is a genuine, non-repayable gift rather than a loan. Lenders accept gifts from family living in Australia readily, provided the giver's bank statement shows the money and the letter is signed and dated. Gifts from overseas are harder: the funds must have left the other country lawfully, and for Nepal that route is generally closed.
Key takeaways
- A gift letter is a short, signed statement from the giver confirming the amount, the relationship, and that the money is not repayable and gives them no interest in the property.
- Lenders pair the letter with evidence: the giver's statement showing the funds, the transfer, and your statement showing receipt.
- Gifts from family in Australia are routine. Gifts from overseas trigger source-of-funds scrutiny, and gifts from Nepal run into Nepal Rastra Bank's restrictions on capital leaving the country.
- Most lenders still want to see some genuine savings of your own, commonly 5% of the price held for three months.
- If family cannot gift cash, a guarantor arrangement is often the better tool.
Family help with a deposit is normal in the Nepali community, and lenders are used to it. What trips people up is the paperwork, and the difference between a gift that comes from a sibling's Commonwealth Bank account in Melbourne and one that is supposed to come from a parent in Pokhara. This post covers both.
What a gift letter must say
Lenders differ on format, and several have their own template you must use, but the substance is consistent.
| Element | Why the lender needs it |
|---|---|
| Giver's full name, address and contact details | To verify identity and, sometimes, to call them |
| Relationship to you (parent, sibling, in-law) | Most lenders restrict gifts to immediate family |
| Exact dollar amount | To match against bank statements |
| Statement that the money is an unconditional gift | Removes it from your liabilities |
| Statement that it is not repayable and carries no interest | A repayable "gift" is a loan and is assessed as one |
| Statement that the giver claims no interest in the property | Keeps the title and security clean |
| Signature and date, witnessed if the lender requires a statutory declaration | Makes it enforceable evidence |
Keep the letter honest. If you and your parents privately agree the money will be paid back, the lender is being misled, and a later dispute about repayment can put the home at risk. Our post on gifted deposits from parents walks through wording.
Evidence that goes with the letter
The letter alone is never enough. Expect to provide:
- The giver's bank statement showing the funds before the transfer.
- The transfer record, whether a bank transfer receipt or the line on the statement.
- Your own statement showing the money arriving.
- Sometimes the giver's identification, particularly for larger gifts.
Lenders read this trail the same way a credit officer does: does the giver plausibly have this money, and did it move cleanly from them to you?
Gifts from family living in Australia
This is the straightforward case. A parent or sibling with an Australian account, Australian income and a clear statement history can gift any amount, and most lenders will accept it with the letter and evidence above. Some lenders also treat gifted money that has sat in your account for three months as your own genuine savings, which can remove the separate genuine savings hurdle. Policy varies, so ask before you rely on it.
Where parents own their home but do not have spare cash, a guarantor home loan uses their equity as security instead of a cash gift. Read the guarantor guide and, before anyone signs, the legal responsibilities of a guarantor.
Gifts from family overseas
Overseas gifts raise two separate questions.
The first is whether the money could lawfully leave the other country. Some countries permit outward remittances within annual limits; Nepal does not permit capital transfers to buy property abroad under its Foreign Exchange (Regulation) Act, as Nepal Rastra Bank publishes. A gift letter from a parent in Nepal for a house deposit describes a transaction that should not have happened, and lenders know it. We explain this in detail in deposit money from Nepal: what is legal.
The second is whether an Australian lender can trace it. Overseas statements in another language, transfers routed through third parties, or money that arrived in cash all fail the test, and the receiving bank has its own reporting obligations to AUSTRAC.
| Factor | Family in Australia | Family overseas |
|---|---|---|
| Legal to send | Yes | Depends on the other country; not for property from Nepal |
| Evidence | Australian statements, easy to read | Foreign statements, translations, remittance records |
| Lender attitude | Routine | Case by case; some lenders decline outright |
| Timeframe | Days | Weeks, if accepted at all |
| Genuine savings still required | Often 5% | Often 5%, and sometimes more |
Genuine savings still matter
Even with a large gift, many lenders want proof that you can save. The common benchmark is 5% of the purchase price held in your name for three months, though some lenders accept 12 months of on-time rent instead. See genuine savings explained for the full rules and exceptions.
Worked example: a $700,000 house in Wollert
Prakash and Anita want a $700,000 house in Wollert. They have $85,000 saved in Australia over two years, and Prakash's brother in Melbourne gifts $55,000 from his own savings.
| Item | Amount |
|---|---|
| Purchase price | $700,000 |
| Own genuine savings | $85,000 |
| Gift from brother (gift letter plus his statement) | $55,000 |
| Total deposit (20%) | $140,000 |
| Loan | $560,000 |
| LMI | None, LVR is 80% |
| Monthly repayment, for illustration at 6.00% p.a. over 30 years | About $3,357 |
Now imagine they had only $35,000 saved and the same $55,000 gift. The deposit becomes $90,000, the loan $610,000 and the LVR about 87%, so LMI applies. Use the LMI calculator and read understanding LVR and LMI to see what that adds. If instead the brother in Pokhara wanted to send the $55,000, the answer would be that the transfer is not permitted and the lender would not count it.
Frequently asked questions
Can a gift come from in-laws or an uncle?
It depends on the lender. Most accept gifts from parents, siblings, grandparents and, usually, parents-in-law. Some extend to aunts, uncles and adult children; others do not. If your giver is outside the immediate family, tell us first so we choose a lender whose policy fits rather than discover the problem after valuation.
Will the lender contact the person giving the gift?
Sometimes. Lenders may phone the giver to confirm the gift, particularly if the letter is not on their template or the amount is large. This is routine verification, not suspicion. Make sure the giver knows to expect the call and can confirm the details in the letter.
Does a gift have to be held for three months before I apply?
Not for the gift itself, but some lenders require you to show 5% genuine savings separate from the gift, and those savings usually need three months of history. If the gift has been in your account for three months, several lenders will count it as genuine savings. We check each lender's rule before lodging.
What if my family overseas gave me money years ago for study?
Money that arrived years ago for tuition through a permitted channel, and has since sat in your Australian account, is treated as your existing funds with an Australian history. Keep the original remittance records in case the lender asks, but it is not a new gift and does not need a gift letter.
Talk to GNT Finance
We prepare gift letters and the supporting evidence with clients every week, and we know which lenders on our panel accept which family members and which deposit mixes. Whether your family is in Melbourne, Sydney or Nepal, we will tell you what will work before you apply. Book a free consultation or call 0426 403 703. Our Nepali mortgage broker service is available in English, Nepali and Hindi, and if you are on a temporary visa, start with home loans for visa holders, our FIRB approval explainer and the new migrants guide.
This is general information, not migration, legal, tax or credit advice. Migration rules change often — confirm with a registered migration agent (MARA) or the Department of Home Affairs.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.