1300 889 743

Guarantor home loans are now the only way to borrow between 100% and 110% of the purchase price of a property.

With the help of a guarantor, many Australians are able to get their foot into the property market early.

What attracts home buyers to these types of mortgages is you don’t need to save a deposit because guarantor covers stamp duty and other purchasing costs and you can also avoid Lenders Mortgage Insurance (LMI).

How do guarantor loans work?


Your guarantor will provide a guarantee for your home loan which is secured on their property. In most cases, this is your parents assisting you to buy a home.

The idea is for you to get into the property market sooner. Once you have paid off part of your loan or your property has increased in value, then you can apply to remove the guarantee.

Guarantor loans have become very popular in recent years as they cost less than standard home loans, they allow you to buy without a deposit and some lenders now allow you to limit the size of the guarantee.

What are the benefits of a guarantor loan?

Recently, no deposit home loans have been withdrawn from the market which makes guarantor loans the only way to borrow 100% or more of the purchase price.

Guarantor loans have several benefits for you as the borrower:

  • You don’t need a deposit, allowing you to buy a home now.
  • Save money by not paying an LMI premium.
  • Discounted interest rates are available from some lenders.
  • You can consolidate some minor debts, such as credit cards, when you buy your home.
  • You can limit the size of the guarantee.

Our mortgage brokers are experts in guarantor home loans. Please call us on 1300 889 743 or enquire online and we can go through your options with you.

How much can I borrow?

How much you can borrow using a guarantor loan may depend on what type of borrower you are:

  • First home buyers: 105% of the property value
  • Construction: 105% of the total land value and cost of construction.
  • Refinancing: 100% of the property value.
  • Debt consolidation and purchase: 110% of the property value.
  • Investors: 105% of the value of your investment property.

Technically, there is no maximum loan size. However borrowing over $1,000,000 will require you to meet additional credit criteria.

Only some lenders accept second home buyers

Many lenders will not allow second home buyers to apply for a guarantor loan as they expect that they should have a strong enough asset position to buy a property on their own.

This is particularly unfair to people who have gone through a divorce or illness forcing them to sell their previous home. We know which lenders are less conservative when assessing their guarantor loans.

Can I borrow more than 105%

In the past, lenders commonly allowed people to borrow 120% with a guarantor home loan. Unfortunately these loan types are no longer available.

With some lenders today the maximum that you can borrow now is 105% of the purchase price and 110% if you have debts to consolidate.

Many people wishing to buy a home have significant consumer debts such as credit cards and personal loans. If you are in this situation then generally you will be able to consolidate debts as well as purchase a property as long as your total debts are no more than 5% – 10% of the purchase price.

Do I need to prove any savings?

Even though guarantor loans allow you to borrow 100% of the purchase price, many lenders still require you to have 5% of the purchase price in genuine savings. This is simply money that you have saved yourself although there are exceptions such as using paid rent as genuine savings.

Other lenders do not have a specific policy regarding this. Instead their credit scoring system will decline your loan based on your asset position relative to your income.

Banks view people who have a high income and a low asset position to be a high risk. Many young people have spent their money on their education, a car, a wedding or travelling and only begin saving for a house later in life. These people are not high risk borrowers, they just have different priorities!

Talk to us to find out which lenders do not require genuine savings.

Can I buy an investment property?

Only two or three lenders in Australia will accept no deposit investment loans supported by a guarantor.

We can assist you to buy one investment property however buying multiple investment properties is not normally accepted. This is because the guarantor is taking an unnecessarily high risk whereas the borrower is making all of the potential profit.

If the guarantor is in a strong financial position then multiple investment properties may be considered.

How is the mortgage for the guarantee structured?


The loan is secured by both the property that you are buying and the property owned by the guarantor.

It is quite simple, and if you use a limited guarantee then the guarantor can reduce their exposure to your mortgage.

The structure is very similar if your parents already have a home loan on their property. The guarantee for your loan is secured using a second mortgage behind their current loan.

How much is the guarantee limited to?

For the majority of guarantor loans we ask the lender to limit the guarantee secured on the guarantor’s property. This means they are not liable for the entire amount of the loan, only a portion of it. The size of the limited guarantee is calculated as follows:

Size of the limited guarantee = (Loan Amount – (0.8 * Purchase Price))/0.75.

For example if you are buying a property for $500,000 and are borrowing $525,000 to cover your expenses such as stamp duty then the calculation would be:

($525,000 loan amount – (0.8 * $500,000 purchase price))/0.75
$125,000/0.75 = A limited guarantee of $166,700 (rounded to the nearest $100)

Is this all too complicated? Just let our guarantor loan calculator figure it all out for you.

What types of guarantees are there?

Security guarantee: With this type of guarantee the guarantor uses real estate that they own as additional security for your loan. If the guarantor already has a loan on their property, then, in most cases, the bank can take a second mortgage as security.

This type of guarantee is most often used when first home buyers with an excellent are buying a home but no deposit. The guarantor is also called an “equity guarantor” by some lenders.

Security and income guarantee: A security and income guarantor is most often a parent helping their son or daughter who is a student or who has a low income to buy their first property. The lender will use the parents’ property as additional security and will rely on the parents’ income to prove that the loan is affordable.

Family guarantee / parent guarantee: This is when the guarantor is directly related to the borrowers. Banks refer to this as a “parental guarantee”. Grandparents, siblings and other family members as guarantors are considered on a case by case basis.

Limited guarantee: A limited guarantee is where only part of the loan is guaranteed by the guarantor. This is most often used with security guarantors so as to reduce the potential liability secured on the guarantor’s property. Guarantees can either be limited or unlimited, depending on both the guarantor’s wishes and the lender’s requirements.

Who can be a guarantor?


Most banks will only allow parental guarantees, that is, a guarantee from the borrower’s parents.

Some lenders can consider guarantees from immediate family members such as siblings, grandparents, spouses, de facto partners or adult children. Friends, workmates or associates are not normally accepted because the banks want to make sure that the guarantor has a strong relationship with you.

If someone other than your parents is your guarantor, then you may need to meet additional lending criteria in order to qualify for a home loan.

What are the risks of being a guarantor?

On paper, the guarantor is ultimately liable for your home loan should you default.

There is a big fear that banks move quickly to sell your home to cover the remaining debt but the reality is that banks try everything to solve the problem before taking this drastic decision.

The reason is that there is often a significant process and cost involved in trying to sell your home.

Chances are, they will struggle to break even going down this path so they would much rather that you keep paying your mortgage.

To do this, they will want to work out why you’re having trouble managing your repayments and whether a solution can be found.

You’ve lost your job

Let’s that you’ve recently been made redundant from your job as a maths teacher.

Lenders take the view that you have a good chance of getting another job soon.

In the meantime, the bank may reduce your mortgage repayments for a period of time until you’re able to find work again.

Your property will be sold first

Should you still not be able to make your home loan repayments, lenders will always take action on your property first before making the guarantor liable to pay out the outstanding debt.

Of course, it’s important to bear in mind that repossession will only commence if the mortgage has been in arrears for 90-180 days.

Don’t forget the limited guarantee

What if the sale of your child’s property isn’t enough to cover the home loan?

Remember, there is only a limited guarantee in place which means the guarantors are only liable for up to an agreed amount.

This is usually around 20% of the purchase price plus the costs of stampy duty, conveyancing fees and other associated home loan costs.

For example, if the outstanding debt is for $700,000 but the limited guarantee is for only $210,000, the guarantors are only liable to cover the outstanding mortgage up to $210,000.

Obviously, if the property sold for $700,000 or more they wouldn’t have to worry about anything.

However, if the property only sells for $440,000, the guarantor will have to cover up to $210,000 with equity in their property to cover the shortfall but they won’t be liable for the remaining $50,000.

Of course, if the property sells for $590,000, then the guarantor would be liable for $110,000.

There are still more option left!

If the guarantors don’t have the equity or savings to cover the outstanding amount, they can apply for:

  • A second mortgage on the their property.
  • A personal loan.

If all of these avenues have been exhausted, banks will sell the guarantor’s property but will only take enough of the proceeds to cover the home loan up to the limited guarantee.

The rest of the sales proceeds will go to the guarantors.

Should I act as a guarantor?

Choosing to act as a guarantor a big decision so it’s recommended that you seek independent financial advice. Ask yourself the following questions:

  • How big is the limited guarantee that you’re committing to? Are you able to cover any outstanding costs should things go pear-shaped?
  • Under what condition will you be liable to pay? Generally, banks will only look to take action if the mortgage is in arrears for 90-180 days.
  • What is the character of the person that you’re guaranteeing? This may be difficult to answer if it’s your own son or daughter but you should be honest in answering this question.

If your child is struggling to save a deposit but you want to avoid some of the risks ofacting as your guarantor, a parent assist home loan may be better suited to your situation.

When can I remove the guarantee?

Ultimately, you do not want the guarantee to be in place for the entire term of the 30 year loan. You should apply to the bank to remove the guarantee when the following conditions have been met:

  • You can afford the repayments without any assistance.
  • Your loan is for less than 90% of the property value (ideally 80% or less).
  • You haven’t missed any payments in the last 6 months.

Most people are able to remove the guarantee somewhere between 2 and 5 years after they initially set up the loan, although this can vary significantly.

Many guarantees are set up because the borrower has no deposit so removing the guarantee most often depends on how much the property appreciates in value and how much in extra repayments the borrower can afford to make.

You can still remove the guarantee if you owe more than 80% of the property value but you may have to pay LMI to achieve this.

What if my parents already have a home loan?

That’s okay. As long as they have sufficient equity, some of our lenders can still secure a guarantee on their property using a second mortgage.

How do lenders work out if your guarantor has enough equity in their property?

The total debt secured on the guarantors property, for example their current home loan plus the new limited guarantee, must be less than 75% – 80% of the value of their property.

For example, if your guarantor had a home loan with $100,000 owing and they needed to give a limited guarantee of $100,000 then the total debt secured on their property would be $200,000. Their home must be worth $267,000 or more for the guarantor loan to be approved.

Don’t worry if this seems complicated! You can use our guarantor loan calculator to work it out.

What if my parents are retired?

Most Australian banks will not accept a security guarantee from a retired or elderly guarantor.

Not every lender assesses guarantors this way. Some of our lenders can accept guarantees from people close to retirement, pensioners and self funded retirees over 65 years of age as long as they obtain legal advice prior to signing the loan offer.

Guarantor Home Loans FAQs.

Why is there no LMI premium?

From the bank’s point of view, if you are borrowing more than 80% of the value of your property then there is a chance that they will lose money if you can’t make your repayments. Because of this they charge you a fee known as Lenders Mortgage Insurance (LMI) to protect themselves in case there is a loss.

This fee can be quite significant, costing more than $10,000.

However with a guarantee as additional security the bank considers your family pledge loan to be under 80% of the value of your property combined with the value of the guarantee. As a result of this they waive the requirement for LMI.

Why is a second mortgage such a big problem?

If your parents already have a home loan secured on their property then the guarantee will need to be secured by a second mortgage.

This isn’t a problem in most cases, however, it can be an issue if your application isn’t submitted to the bank correctly.

Do not commit to a property until:

  • Consent for the second mortgage has been granted.
  • A bank valuation has been completed on your guarantor’s property.
  • Your lender has issued a formal approval.

The lender that already has a home loan secured on your parents’ property needs to give consent to the guarantee being secured on the property. There is a small risk that they will deny or withhold the consent which can leave you high and dry.

The method of calculating the equity in your parents’ property can be very complex if they already have a loan. Please use our guarantor loan calculator or call us on 1300 889 743 for more information.

My bank won’t let me consolidate debt

Very few lenders will allow you to buy a home and consolidate your credit cards or personal loans at the same time. We know which lenders will allow you to roll everything into one simple, low repayment each month.

Note that you can only consolidate a few minor debts, and if your debts are over 5% of the purchase price then you will not be able to roll them into the mortgage with any lender. Your repayments must be on time, every time, before a lender will allow you to combine them into your new mortgage.

What are the names used for guarantor loans?

Every lender seems to have come up with their own name for guarantor loans! St George Bank uses the term ‘Family Pledge’, CBA uses the term ‘Family Support’ or ‘Family Equity’, Rams uses the term ‘Fast Track’ whereas ANZ and Westpac use the term ‘Family Guarantee’.

Confused yet?

Don’t worry, they all mean essentially the same thing. Most of these terms refer to a security guarantee, as only a few select lenders allow other types of guarantees.

There are big differences between the bank’s credit guidelines, loan types and discounts for family guarantee loans.

Can I get a 100% construction loan?

Yes, it is possible to borrow 100% of the land and construction costs if you have a guarantor.

However, be aware that many lenders do not allow “loan increases” on guarantor loans. What this means is that if you buy the land and then apply for the construction loan later, it may be declined!

Please call us on 1300 889 743 to discuss your situation, we know how to structure your loan to get it approved!

Can I get an 80/20 low doc guarantor loan?

Low doc loans cannot be used with the support of a guarantor as lenders are very conservative with their assessment of no financials home loans.

It may be possible to get around this if the guarantor takes out a loan on their property and lends this to you for you to use as your deposit. Although this is not an ideal situation, it can work for some borrowers.

We call this the 80/20 method as you will borrow 80% of the property value and your family member will borrow the other 20% on their property. Many lenders do not accept this method of financing so please enquire online to speak to a mortgage broker that understands this loan structure.

Why do I need an expert?

Guaranteeing somebody else’s loan is a major commitment so you should always seek advice from the appropriate professionals such as your solicitor before deciding to proceed.

We recommend that you have a preliminary discussion with your solicitor before you apply for the loan and then take the ‘Guarantee & Indemnity’ documents to your solicitor for legal advice prior to signing them.

It also helps to seek out a specialist mortgage broker like Home Loan Experts because there are many aspects to consider when applying for this type of mortgage:

  • Getting approval: Lenders are more conservative than ever, but they are particularly conservative with guarantor loans. We know which lenders accept which types of guarantees and which lenders will accept someone in your situation.
  • Know the terms and conditions: Some banks have simple terms and conditions for their guarantor loans and allow you to limit the amount of the guarantee. However many lenders will not limit the guarantee which means the guarantor could be in a much worse position if you cannot make your repayments.
  • The exit strategy: The loan may have a term of 30 years, however you don’t need to keep the guarantee in place for that long. We can help you work out a strategy of either making extra repayments, or refinancing to remove the guarantee in as little as 2 to 5 years.
  • Protecting the guarantor: If you cannot pay your loan then how can you protect your guarantor from having to pay your loan and possibly losing their home? Did you know that you can reduce the risk to the guarantor by obtaining insurance?

If you don’t set up your mortgage in the right way then you may be putting your parents at a higher risk, or you may not be able to remove the guarantee as quickly as you would like.

Please call our mortgage brokers on 1300 889 743 or enquire online to find out how we can help you.

Case Studies:

Examples of using a guarantor to avoid saving a deposit.

The situtation:

Nick has been renting for a couple of years and decides now is the time to buy his very own home.

He’s found a nice 3 bedroom house not far from where he works. The property is worth $500,000 but he knows if he doesn’t act fast he’ll miss out on buying it.

The problem is that he hasn’t been able to save up a deposit to get a home loan due to renting. He needs at least 5% plus costs in order to qualify for a mortgage.

His parents – who are both retired – are willing to gift him the money for the deposit but it’ll take them around 3 months or so for them to save the money to give to him.

If that weren’t enough, the gifted deposit wouldn’t be classed as genuine savings and it’d take Nick another year or so to build up 5% of the purchase price in his own savings.

The solution:

Instead of saving the money and gifting Nick the money for the deposit, his parents can use the equity in their property as security for his home loan.

Their home is valued at $600,000 with around $255,000 owing on their mortgage. Since both of Nick’s parents are retired, there is one lender that will accept this guarantor scenario.

Using their parents’ property as security for a home loan, Nick is able to able to borrow up to 105% of the purchase price to cover the home loan plus the costs of stamp duty and conveyancing fees.

If Nick were to buy the property with his own 5% deposit, he’d be paying more than $20,000 in Lenders Mortgage Insurance (LMI), a one off fee payable when borrowing more than 80% of the property value.

The Results:

  • Nick was able to quickly buy the property before someone else did.
  • He was able to avoid mortgage insurance.
  • He was able to use the few thousand that he had saved for the deposit as extra repayments on his mortgage with enough left over to take a little holiday.

Example of using a guarantor loan to consolidate debt.

The situation:

Alicia and Chris are about to get married and want to buy a family home. They’ve found a perfect place in a quiet suburb valued at $700,000.

Their combined income is around $200,000 and they’re currently paying around $1,000 a week in rent for a studio apartment in the city.

Alicia and Chris also have a car loan with $30,000 owing and a credit card. The credit card is almost at its limit at $6,000 but they’ve been making their payments on time.

They’re paying $750 a month for their car loan and $180 a month in credit card repayments.

They’ve been managing their bills and debts perfectly but they’re worried that they won’t be able to manage all of their financial commitments by having to make home loan repayments as well.

Luckily, Chris’ parents are working full time and own a home worth $1.2 million with around $600,000 owing on the mortgage.

The solution:

By using the guarantor option, their bank is willing to lend up to 105% of the purchase price to cover stamp duty and conveyancing fees. On top of that, they’re able to consolidate one of Alicia and Chris’ debts into the home loan.

Effectively, they’ll be borrowing about 109% of the purchase price.

They decide to consolidate the car loan because it has the most amount of debt owing.


With their home loan approved, Alicia and Chris are paying $4,287 per month in mortgage repayments. This includes their car loan repayments.

So how much are the couple better off by consolidating this debt into their loan?

Well, by not consolidating and continuing to paying their debts separately, Alicia and Chris would have been paying $4,876 per month.

  • They are $589 better off per month and are able to better manage their debt.
  • They avoided having to save a deposit to buy the property.
  • They avoided the cost of LMI.
  • They’re enjoying their new home before they tie the knot.
  • Discounts: Competitive professional package and basic loan discounts are available.

How can you help me get approved?

We are mortgage brokers who specialise in guarantor supported home loans. We can quickly assess your situation, work out which lenders can approve your application and which loans would be the cheapest for your situation.

Our additional free services include reminding you when it may be possible to remove the guarantee and discussing the proposed loan with the guarantor to make sure that they understand and are comfortable with it.

To talk to a mortgage broker that specialises in guarantor supported lending please enquire online or call us on 1300 889 743.

  • Draz

    Hi guys my parents are recently retired and own their home worth around 600000, I’m 35 and earn between 1400-2000 per week all though my out goings are around700 pw inc rent loan n vehicle , my question is are my parents eligible guarantors for 100-105% loan

  • Hi Draz,
    Yes this would be fine. Many lenders don’t accept retired guarantors however there are others that can help. We’d need to discuss with your parents in detail as well and of course fully investigate your situation.
    If you’d like our help then please contact us https://www.homeloanexperts.com.au/free-quote/

  • J Dawson

    Hi. My husband and I have a really bad credit rating, due to past issues with work etc. However, our income is quite good now. We were given custody of my niece and two nephews so receive a carers allowance from family services of $1794 per fortnight. I also receive $1255 per fortnight from Centrelink and my husband earns $785 net per week from work. We now have 6 kids plus myself and my husband in a 3 bedroom house sharing with my in-laws, plus we have another baby on the way. My in laws have decided they don’t want us here anymore. However, despite our income, we keep getting declined from the banks due to our credit rating. My brother in law owns his own home and has agreed to go guarantor for us. Is there anything you can do to help us? We are desperate. :(

  • Hi there,
    It’s unlikely we can help unfortunately as you have a good income however your living expenses would be high as well due to the size of your family.
    It may be possible if your bother in law borrows on his home and then lends you a deposit. We could then go with a specialist lender to get you approved https://www.homeloanexperts.com.au/bad-credit-home-loans/

  • Mel

    Are there an restrictions on what type of property you can purchase with a guarantor home loan? IE, buying land and building a house instead of purchasing an already built property.

  • Generally, you can buy any type of Australian property with a guarantor home loan. If you’re planning on buying land and applying for the construction loan later, note that many lenders don’t allow loan increases on guarantor loans so it may be declined.

  • Rachel Pala

    Hi there, I am intending to use the Guarantor Home Loans to secure a 100% home loan. My parents have 3 properties in PNG, can I still use them?

  • Hi Rachel
    Unfortunately overseas properties cannot be used. Your parents can borrow against their properties and then give this to you as a gifted deposit https://www.homeloanexperts.com.au/genuine-savings/gifted-deposit-home-loan/

  • Hayley ‘Jelly’ Jennings

    I’m British and my partner is Australian. My parents own numerous properties in England, could these be used as collateral for an Australian mortgage?

  • Hi Jelly
    We have some lenders who can assist a joint application of an Australian and a Temporary Resident https://www.homeloanexperts.com.au/non-resident-mortgages/temporary-resident-mortgage/
    However no lenders in Australia will use a foreign property as security for a guarantor loan. Your parents can contact a mortgage broker in the UK and get them to refinance their property to release equity. They can then lend or gift this to you as a deposit https://www.homeloanexperts.com.au/genuine-savings/borrowed-deposit-home-loan/
    While some lenders don’t accept a deposit that comes from overseas like this, I expect we should be fine as long as the rest of your situation is ok. Just give us a call when you’re ready to get approved.

  • tanya

    HI, my husband and I would love to buy a house. We only have 1 dependent and he pays child support. We both have been bankrupt previously due to credit card debt and him, divorce issues. He is discharged, I am not. I am still paying off my car with no defaults and never late with utilities bills etc. I had 100% excellent rating until my 2 credit cards got the better of me and I had no choice. My car loan will be complete in Aug, (I have been paying a little extra every fortnight for the past 5 years of the loan). After this loan we have NO DEBTS. He earns $99K and I earn $55K. We are desperate to start fresh and buy a home together. Are there any options for us? WE would only like a 20year loan as he is 53 and myself 45.

  • Jade

    Hi just wondering if you can elabortate on this topic a bit more? My partner and I are looking to purchase land this year, but we don’t want to build on our block as soon as it titles, we are going for guarantor loan, does this mean we would have to go for the full combined land/home loan at the same time, due to not being able to increase a guarantor loan? in other words we can’t go for a $220,000 land loan with a guarantor then once we are ready to build the house use that same guarantor for the increase loan value?
    Thanks Jade

  • Hi Tanya,
    You’d need to wait until you are discharged before we can help https://www.homeloanexperts.com.au/bad-credit-home-loans/discharged-bankruptcy/
    If you are debt free, discharged from bankruptcy, have a good rental history and a family member who can guarantee your loan using their property (and is aware of your history) then we may be able to assist.

  • Karen Perry

    My partner and i are trying to get a home loan we are both 52 and have paid rent for 7 years at $530.00 per week and never been late our rental history is perfect,, but in doing that we cannot save for a housing loan so we are looking to get a no deposit loan of $800,000 and his parents as guarantees their house is worth 1.2-1.3 million they are both retired now. Unfortunately we both were left with nothing in our Divorces and would like to start a new chapter together, my partner earns $110,000 to $115,00 per year and i $25,000

  • Hi Karen,
    Sorry to hear that you’ve had to start over. I hope the next few decades go better for you.
    Yes we can help with this. We have some lenders that will accept your partner’s parents as guarantors. We just need to be sure of a few things:
    – Ideally your partner’s parents should have other assets in case something does go wrong e.g. superannuation / shares / another property. We want to reduce the risk of them losing their home.
    – We can consider getting insurance that will reduce the risk further such as income protection, life and TPD.
    – That you and your partner have an indicative retirement age so that we set up the loan to be paid off before you retire
    – We’d need confirmation of your rental payments to show the lender that you can handle your money well.
    If you’d like our help then please contact us https://www.homeloanexperts.com.au/free-quote/

  • Nathan Harma

    My partner and i spent all our savings on our Engagement/Wedding/Honeymoon in the past year so have no deposit. However she has a retired father (Aged 70) with a $900k house (no owing on it), $500k Savings and $300k super, who is willing to be guarantor however his age may be an issue. Would his age be a big no from borrowers as guarantor?

  • Hi Nathan,
    That will be ok with some lenders. Yes we can help with this. https://www.homeloanexperts.com.au/free-quote/
    Congrats on getting married by the way, I hope you have a great life together.

  • Carla van Woudenberg

    Can you have two guarantors? One for a loan for land? And another one for construction? Thanks!

  • Hi Carla
    It would need to be the same person guaranteeing both loans.

  • Leanne C

    As a single mother with 3 kids working for myself part time, what are my options of getting a loan of approximately $250000? I possibly have a friend that would go guarantor. I dont have a fabulous credit history but its not the worst either. Have solidly payed over 300 per week rent for years now and up to date with all bills rent etc

  • Hi Leanne
    Unfortunately if you’re self employed and dont have great credit and a friend as a guarantor rather than your parents it’s unlikely to gey approved.
    You would have better chances when your credit is clear and if you have a payg role.

  • Hayley Roberts

    My partner and I are very keen to buy our first property, however my partner has recently begun full time study. I am on an annual study of $60k. We have no dependents or credit card debts and currently pay $300 per week in board. We don’t presently have a big amount of savings (about $4k) but my dad is willing to be a guarantor on the property and currently owns a house worth approximately $540k with $175k left on the mortgage. Do you think there is any way we could borrow up to $340k?

  • Hi Hayley
    Having a history of paying board and some savings of your own helps. Also if we know approx when your husband finishes study and approx salary at the end then this will help. The only way we can get approved is if your dad is an income guarantor as well as a security guarantor. That means he’d assist with repayments. When your husband finishes studying then you two can make the full repayments.
    Income guarantor isnt a normal loan, few lenders offer it. But based on what you’ve said you’d be perfect candidates.

  • Trish

    My son and his wife are separated. She wants him to buy her out which would mean refinancing in his name.
    My son is self employed. Never defaulted on mortgage payments.
    I am 65 and own a home. Can I be guarantor for my son.

  • Hi Trish,
    Yes you can be a guarantor. This is only needed if your son doesn’t have much equity in the home. If there is a lot of equity then there likely isn’t any need.
    Note that only a few lenders accept a refinance with a guarantor. Please ask your son to contact us if he’d like our assistance to get approved https://www.homeloanexperts.com.au/free-quote/

  • Julie

    Hi im a single mum of 1 and want to buy my first home. I work fulltime and earn 80k. I pay 400wk in rent with an excellent rental history, my only debt is a 15k personal loan which i applied for and used for a holiday 6months ago. I dont have parents but my sister and her husband are willing to guarantor for me using their property. Do you think id have a chance of approval?

  • Hi Julie,
    Yes this is possible, but it would depend on the price of the property that you’re planning to buy. Your borrowing power may be more limited than what you need. Having a sister as guarantor is possible with some lenders as an exception to policy or they can release equity from their property and lend this to you.

  • Amy

    Hi there, I’m looking at buying my mothers home here in Australia. Would she be able to go guarantor using equity from her properties in NZ?

  • Hi Amy,
    No the property used for a guarantee has to be in Australia.
    She could allow you to borrow 80% from a lender and then she can lend you 20% from the sale proceeds. That may work if she’s open to the idea.
    If she thinks this is suitable then please contact us https://www.homeloanexperts.com.au/free-quote/

  • Rose-Marie

    Hi there, I get 24k year for family tax benefit and husband works permanent earns $38,400 year … currently renting $410 per week , have 2 kids and $3000 in savings . can we apply for a home loan ? I do have my brother who owns a home $430,000 value and can be my guarantor if needed? please help … hoping to buy in 3months (fingers crossed)

  • Rose-Marie

    wanting to buy in Brisbane south

  • Hi Rose-Marie,
    You can use this calculator to work out your borrowing power https://www.homeloanexperts.com.au/how-much-can-i-borrow/
    The main issue is that it’s your brother as guarantor instead of your parents. Some lenders can consider this on a case by case basis. We’d need all of your documents to assess this and be sure.

  • Kaisar

    hi, my wife and I currently live in my brothers granny flat in Sydney. I earn $80k/year full-time and my wife is currently on maternity leave with our first child. She will be returning to part time work in a few months earning about 30-40k/year as part time. we don’t have any debts, no credit cards and have a clear credit. We have $5000 in savings, my brother is willing to be our guarantor however currently doesn’t have much equity on his house. we are looking to purchase a property in Melbourne between $350-450k. Are we able to apply for a home loan?

  • Hi Kaisar
    Once your wife returns to work you should be eligible to buy.
    If your brother doesn’t have much equity then it may be best for him to refinance his loan and release some equity for you to use as a deposit. This works better than a guarantor loan when there isn’t much equity. He should seek legal and financial advice before doing this.

  • Kate Cunliffe

    Hi, we are thinking of building and would like to do owner builder (my husband is a builder but not licensed). We have a guarantor but they are self funded retirees. How will/does this work?

  • Ben

    Im looking at buying a lifestyle rural block 550 acres, currently have a 40 acre property with a house but not enough equity for the deposit as it is so big, classed as commercial, need a 30% deposit. my parents own their house which is valued more than the block, and said they will go garantor for me to buy the new one til i can sell the old one, can you help me with getting finance will be looking at getting enough to cover the full cost of buying the block, plus solicitors cost.

  • Hi Ben,
    This is a challenge but it is possible. Max we can lend on the 550 acres is likely to be 60% to 70%. Banks traditionally don’t do guarantor loans for commercial properties however if your parents own part of your new property then one of our lenders can consider it.
    The easier ways are:
    – Sell your current property first (if possible)
    – If your parents are working they can get a loan on their property and then lend this to you.

  • Tony

    My wife and I are looking to buy using my parents as guarantors.
    They are retired and we are second home buyers.
    We have excellent rental history but are unsure if anyone would approve us for a guarantor loan due to the above.
    Looking to cover 20% deposit of house incl stamp duty.
    Please advise.

  • Hi Tony,
    Yes we can help with this. Some lenders wouldn’t consider your parents as guarantors but others would be fine. You can contact us here https://www.homeloanexperts.com.au/free-quote/

  • Help

    I am currently studying full time in my final year of university (Teaching). I am working casually and make approx. 30k/yr. My partner has a permanent full time job and earns approx. 75k before tax. We have $130,000 in savings and are looking to build for $800,000 (a loan on $670,000). only issue is that I don’t have full time employment. first year salary is around 65k.
    My mum is willing to go guarantor, she owns a house valued at 900k which is paid off, but currently has 150 tied up in an offset account.
    Would my partner and I be able to borrow $670k with my mum as a guarantor and myself not currently having a full time job?
    Thank you for your help.

  • Hi There,
    I’d say the main challenge if your income rather than your deposit. So there are a few options:
    1. Wait until you finish university and then your income is high enough.
    2. Your mum can be a part owner of your property (10% – 15%) and then we can use her income to prove you can afford the loan. Note that she would need to help with repayments as well.
    3. Your mum can gift you funds to buy the property and you get a smaller loan that you can afford on your current incomes. When you are working full time and your property has gone up in value you can increase your loan and pay this back.
    4. Potentially an income guarantor type loan would work for you. We must be only slightly reliant on your mum’s income which looks like it is the case.

  • Elise


    My husband and I have wanted to get into the property market for a while, being a young family. He has just started a new full time job and will be on a salary of 43K a year, not including bonuses. We currently receive FTB $62.86 per week and are looking to apply for more as my husbands salary is under 50K a year. We have 30K in savings, 15K in shares and own a $16,000 outright. I am not working at the moment and we have one dependent. We were told by our local bank that we would not be able to borrow much at all as our income is so low. Would a parental guarantee be an option for us? Thanks alot.

  • Hi Elise,
    A parental guarantee can help you to borrow more but only if your parents are working, they have property that can be added as security and we’re only using a little bit of their income. As a general rule you can borrow 20% more. Note that the lenders who accept an income guarantee https://www.homeloanexperts.com.au/guarantor-home-loans/income-guarantee-home-loan/ don’t normally accept a probationary period https://www.homeloanexperts.com.au/unusual-employment-loans/on-probation-home-loans/ so your husband may need to ask his employer if this can be waived.

  • Maddy


    Both me and my wife work on full-time permanent government jobs and earn around 180k. We want to enter the property market now and are looking to buy our first home for around 800-850k in ACT. However we have around 45k in deposit at the moment. My wife’s brother-in-law is willing to help us as a guarantor. He owns a house with equity around 300k and is a high income earner (over 200k). Can we go for a loan that combines mortgage+stamp duty with his help.

  • Hi Maddy,
    Yes we can assist with this. There’s a couple of different ways to structure it with either him being a guarantor (less lenders available) or him borrowing on his property and lending this to you as a deposit (easier way to go, more lenders available).
    Please contact us https://www.homeloanexperts.com.au/free-quote/ and once we have your documents such as payslips and deposit info we can work out the best way forward.
    P.s. well done on saving $45k, you’re well on your way to home ownership.

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