Last Updated: 10th April, 2024

Home Buyers Love Guarantor Home Loans

Published by Otto Dargan on November 6, 2014

Are you tired of living at home or renting? Are you struggling to save up enough for a deposit on a home? A guarantor home loan is still the best way to get a home loan with no deposit.

With property prices set to continue their march for most Australian capital cities over the next three years, it’s no surprise that around a third of first home buyers are getting some financial help from their parents, either through a gift, a loan or guarantee.*

What may surprise you though is that your parents may hold the key in getting your foot into the booming Australian housing market.

What does this mean for you?

By having your parents use their own property to secure your home loan, it means:

  • You can borrow 105% of the property value including your 5% deposit, stamp duty (and other government fees), conveyancing and other costs associated with a home loan. Buy a property now rather than waiting for prices to grow out of reach!
  • You can avoid paying a one off fee known as lenders mortgage insurance, which can be more than $26,000 and that’s if you have 5% in genuine savings! Discover how much you could save in mortgage insurance with our LMI calculator.
  • You can limit the size of the guarantee. What this means is that your parents can limit how much of the equity in their property they want to use as security for your mortgage, reducing their risk in case you happen to default. In these cases, most people choose to limit the guarantee amount to 25-30% of the value of the property that you’re purchasing.
  • Some lenders will even consolidate some minor debts such as credit cards when you buy your home. This is only available with a few select lenders on our panel and depends on the amount of debt you have.

Are any other alternatives?

There are other no deposit options out there but they’re only available through specialist lenders. We have special relationships with these lenders and we may even be able to get you a discounted interest rate.

Please call 1300 889 743 or complete our free assessment form to discuss your situation with an expert today. We’re experts in guarantor and other no deposit home loans so let us find you an option that best suits your needs.

*Source: La Trobe Financial