Family Guarantee Loans

Your Family's Support. Your Home Sooner.

A family guarantee lets you buy with little or no deposit by using your parents' property as additional security. No cash gift needed — just a guarantee.

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How It Works

One Guarantee. Two Properties. Zero LMI.

Instead of saving a 20% deposit, your parents offer a limited portion of their property equity as security. You avoid Lenders Mortgage Insurance and get into your home years earlier.

1

Family Agrees

A parent or close family member agrees to act as guarantor using equity in their own property.

2

We Assess Both

We review both your borrowing position and your guarantor's equity to find the right lender and structure.

3

Limited Guarantee

The guarantee is limited to a specific dollar amount — usually around 20% of your purchase price. Not unlimited liability.

4

Guarantee Released

Once you've built enough equity (usually reaching 80% LVR through repayments or property growth), the guarantee is released and your family's obligation ends.

Eligibility

Who Can Guarantee Your Home Loan?

Parents

The most common guarantor arrangement. Parents use equity in their own home to support your purchase — no cash changes hands.

Siblings

Some lenders accept siblings as guarantors, though policies vary. We know exactly which lenders offer this flexibility.

Grandparents

Select lenders allow grandparents to guarantee. Age requirements and property ownership conditions vary by lender.

De Facto Partners' Parents

Buying with your partner? Even de facto partners' parents may qualify as guarantors with certain lenders.

Investment Property Owners

The guarantor's property doesn't have to be their primary residence. Some lenders accept investment properties as guarantee security.

Retirees

Retired parents can still guarantee. Income isn't always required from the guarantor — it depends on the lender and guarantee structure.

The Full Picture

Benefits & Protections For Your Family.

Why Use A Family Guarantee

  • Buy sooner — with as little as 0–5% deposit
  • Avoid LMI entirely — a saving of $10,000–$40,000+
  • Guarantee is limited — not unlimited liability
  • Released once you reach 80% LVR
  • No cash gift required from your parents
  • Keep your savings as a financial buffer

Risks & Protections To Know

  • Guarantor's property is at risk if you default
  • Guarantor must get independent legal advice (required by most lenders)
  • Guarantee can't be released until equity threshold is met
  • If guarantor wants to sell their property, it can complicate release
  • Some lenders charge a slightly higher rate on guarantee loans
  • Both parties should fully understand the commitment before proceeding
Example

How The Numbers Actually Work.

Buying a $700,000 Home

Purchase Price $700,000
Your Savings (5%) $35,000
Family Guarantee (15%) $105,000
Your Loan Amount $665,000
Loan Portion 1 (80% LVR) $560,000
Loan Portion 2 (Guaranteed) $105,000
LMI Saved ~$18,000

Once your property value increases or you pay down enough to reach 80% LVR, the $105k guaranteed portion is refinanced to standard security and the guarantee is released.

Common Questions

Family Guarantee FAQs

Does my guarantor have to make any payments?
No. The guarantor doesn't make any loan repayments. Their role is purely to provide additional security. You're fully responsible for all repayments — the guarantee is only called upon if you default and the lender needs to recover the shortfall.
What happens if I can't make my repayments?
If you default and the lender can't recover the full debt from selling your property, they can claim against the guaranteed amount using your guarantor's property. This is why we always structure limited guarantees — capping the guarantor's exposure to a specific dollar amount, not the full loan.
Can the guarantee be released early?
Yes. Once your loan-to-value ratio reaches 80% — either through paying down the loan, property value increases, or a combination of both — you can apply to release the guarantee. We monitor this for you and initiate the release as soon as you're eligible.
Does the guarantor need to have their property fully paid off?
No — but they need enough available equity. Most lenders require the guarantor's own LVR (including your guarantee) to stay under 80%. If they still have a mortgage, there just needs to be sufficient equity above what they owe.
Can I use a family guarantee for an investment property?
Some lenders allow it, but most restrict family guarantees to owner-occupied purchases. If you're looking to use a guarantee for an investment property, we know exactly which lenders will consider it.
Does the guarantor need independent legal advice?
Yes — almost all lenders require the guarantor to obtain independent legal advice before the guarantee is formalised. This protects both parties and ensures your guarantor fully understands their obligations. We can recommend solicitors experienced in guarantee arrangements.

Ready To Buy With
Family Support?

Book a free call. We'll assess your situation, explain the guarantee structure, and find the right lender for both you and your guarantor.

Book Free Call ➜ Email Us

Or call 1300 080 180