Guarantor Home Loans

Borrow up to 105% with a guarantor home loan.

Save money by not paying LMI premium.

Get into the property market faster with a smaller deposit.

Borrow up to 105% of the property value

How Do Guarantor Loans Works

A guarantor home loan is when someone in your family (usually parents) uses their property to help you get a loan. With this type of loan, you can borrow up to 105% of the property's price. In this arrangement, 80% of the loan is secured against the property you're buying, and the remaining 25% is secured against your parents property.

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Meet Matt

Property Investor

We Helped him Borrow 100% for His First Investment Property Using His Parents as Guarantors.

Matt recently achieved a significant milestone by borrowing 100% of the funds needed for his first investment property, with help from his parents.

Overcoming the Deposit Challenge

Starting out in property investment can be tough, especially when saving up a large deposit feels like an insurmountable challenge. Matt’s story demonstrates how securing your first investment property can be possible with the right support and expert guidance.

The Investment Property

Matt aimed to purchase an investment property valued at $400,000. He had managed to save a small deposit of $20,000 but required additional support to cover the 20% deposit. We facilitated this by using a guarantor solution involving his parents.

How the Guarantor Solution Worked

We utilised Matt’s parents’ property, valued at $650,000 and free of any existing loans, as security. By leveraging this property, we were able to secure 80% of its value as a loan, which provided $520,000. This covered the cost of the investment property.

Investment Property Value: $400,000
80% Guarantor Property Value: $520,000

With support from his parents’ property, Matt was able to borrow the full $400,000 needed for his investment property. His savings covered additional expenses, including stamp duty of $13,460 and legal fees totalling $5,000.

Start Your Property Journey

If you’re ready to embark on your property journey, regardless of buying your first home or investment but finding saving for a deposit challenging, contact us. Our team of expert advisers is here to explore your options and help you find the best path to achieve your property goals.

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The Four Different Types of Guarantor Home Loans

Guarantor loans help people enter the property market, especially if they have limited savings or a lower income. Keep in mind that different lenders may have varying terms, so it's crucial to get advice from financial experts to understand the responsibilities of each guarantor arrangement.

Security Guarantee

The guarantor uses their property as additional security for the borrower's loan.

Suitable for first-time homebuyers with good credit but no deposit.

If the guarantor already has a mortgage on their property, the lender may take a second mortgage as security.

Limited Guarantee

Only part of the loan is guaranteed by the guarantor, reducing their potential liability.

Often used with security guarantees to limit the exposure secured on the guarantor’s property.

Family Guarantee

Guarantor is a family member directly related to the borrower.

Applies to various family members, including parents, grandparents, and siblings, on a case-by-case basis.

Security and Income Guarantee

The guarantor provides both their property as security and their income to prove loan affordability.

Often used when a borrower, typically a student or someone with a low income, needs assistance in buying their first property.

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FAQs about Guarantor Home Loans

To meet the requirements of a Guarantor Home Loan, you need to demonstrate an immediate family relationship between you and the guarantor, and the guarantor must have a good credit history. Acceptable guarantors include:

· Your parents · Your adult children · Your spouse or de facto partner · Siblings · Grandparents · Legal guardians

Relatives such as uncles, aunties, and cousins are generally not accepted. However, if you can demonstrate that you have lived with them for an extended period and sign a statutory declaration to confirm your relationship, they may be able to act as your guarantor.

Yes, you definitely don’t want your guarantor to stay on your loan for the whole 30-year term. Most people aim to remove their guarantor once their loan is at 80% or below the property value. This can happen if your property value has increased over time or if you have paid down your loan.

If your loan is still above 80% when removing your guarantor, you will be liable for lenders mortgage insurance. Usually, when you have paid down your loan to 80%, you can proceed with removing your guarantor.

We're here to support you through the entire home buying journey.

Make an enquiry

Send us an enquiry or call us on 1300 103 998. Our team will call you within 30 minutes during business hours. Our service is free of charge.

Get a pre-approval

We’ll review your situation and help you understand your borrowing capacity and help you to obtain a pre approved home loan.

House Hunt

Once your pre-approval is in place, you can go house hunting. If you find something you like, let us know, and we’ll provide you with property reports. to aid you in your decision-making process.