How much can I borrow?

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

How much you can borrow using a guarantor loan depends 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.

Call us on 1300 889 743 or complete our online enquiry form to discover if you qualify for a guarantor home loan!

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Recently, no deposit home loans have been withdrawn from the market which makes guarantor loans the only way to borrow 100% or more of the purchase price.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

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 credit history are buying a home but have 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.

Check out the guarantor eligibility page for more information.

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 the guarantor’s 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 the guarantor’s home.

The bank knows that it will struggle to break even by 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 say 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, if you have a limited guarantee in place you are only liable for up to the agreed amount.

This is usually around 20-35% 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.

At any rate, you should be aware of the size of the guarantee that you’re providing.

You have more options!

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.

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Should I act as a guarantor?

You should never feel pressured to enter into a guarantor loan.

Choosing to act as a guarantor is 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 of acting as your guarantor, a parent assist home loan may be better suited to your situation.

What if I change my mind about being a guarantor?

That’s ok just but try and make this decision before your son or daughter receive home loan approval and sign the Contract of Sale.

The reason is that the borrower may default on the contract and be sued.

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.

To be clear, you must actually apply with the bank to remove the guarantee – it isn’t automatic!

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.

Should I get insurance?

To give you and your parents added protection in the event of default, you may want to consider getting life, total and permanent disability, and/or income protection insurance.

It’s not a requirement for qualifying for a guarantor loan but it can allow you to pay out your home loan if you are hit with an unfortunate event that stops you from working.

It’s best you seek advice from a financial adviser to ensure that you choose an insurance product that suits your needs and financial situation.

Are there other protections for guarantors?

From 1 July 2019, the Australian Banking Association will enforce a new Code of Banking Practice (COBP).

As part of these new guidelines:

  • Guarantors must be given a minimum of three days to review their guarantee documents and to consider their obligations as a guarantor before signing and returning their guarantee documents.
  • Guarantors will have cooling-off period after signing the guarantor agreement.
  • Guarantors will be encouraged to seek independent legal advice before signing, as is currently the case.
  • If you, as the guaranteed borrower, get into financial difficulty, or your circumstances change, your guarantor (parents) will be notified by the bank.
  • The bank will first attempt to receive assets from you as the borrower before starting action against your parents to repay the home loan. If this is a concern to you, we recommend that you seek independent legal advice.

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.

To be clear, you guarantor should declare all loans secured on their property including business or commercial property loans, otherwise the approval may be withdrawn before settlement.

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.

Can you sell your house if you are a guarantor?

Let’s say that after 3 or 4 years acting as your guarantor, your Mum and Dad decide they want to pull up stumps and sell their home.

It could be that they want to downsize or live their retirement dream of travelling the world. What do you do then?

Chances are you wouldn’t have paid down your mortgage to no more than 90% of the property value (the minimum LVR at which you’ll be able to remove the guarantee with most lenders).

So before they sign up to the guarantor arrangement, they should be aware that they may be unable to sell the property or borrow on their mortgage (top-up).

Before you tell your parents to hold off on whatever financial goals or dreams they had, you have some options available.

If you owe more than 90% LVR, are you able to come up with your own savings to cover the difference?

The other option is that once your Mum and Dad sell, ask them if they can secure the guarantee with a dollar for dollar term deposit.

For example, if the guarantee was $90,000, then they will need to provide the lender with a $90,000 term deposit which will be held as security.

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 if I get divorced?

The less obvious risk of going into a guarantor loan arrangement is you splitting up with your partner and the partner choosing not make mortgage repayments.

This not only puts you at risk of default but can also potentially put your parents in a precarious position.

Playing with the mortgage in this way is quite common when couples get divorced. In fact, they’re often advised by their solicitor to do so!

If you can get past the legal stoush, please get in contact with us by completing our free assessment form and we can tell you how we can help.

We’re experts at buying out ex partners and we can start the conversation with your bank as to how this will work with your parents providing a gurantee.

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

Example of using a guarantor to avoid saving a deposit

The situation

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 Result

  • 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.

The Result

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.

  • Rafa Orellana

    I heard from my mates that now anyone in Australia with a property can be a guarantor. Is this true?

  • Yes, it may be possible if they own a property in Australia.

  • Kylie Taylor

    What if your guarantor is in NZ? Is this possible?

  • Yes, the guarantor can be NZ as long as they have a property in Australia. If the property is in New Zealand or anywhere else outside Australia, then you can’t use that person as the guarantor.

    How can you get around this? They can borrow in their country on their property and then lend that to you as a deposit. You can then apply for a no genuine savings loan

  • Jas Florance

    Can you go for a low doc loan with a garuntor?

  • Hi Jas, this is possible only in exceptional circumstances. We would need to see some evidence such as BAS statements, bank account statements or an accountants letter to verify your income. This would be with one of our specialist lenders.

  • Rik Kay

    My exdefecto partner and I own a house that we are keeping for our son. Can I use this house as guarantor if my ex agrees to be Guarantor?

  • Yes, Rik Kay. If your ex partner agrees then it is possible however they would need to seek financial and legal advice.

  • Fiona

    Hi. I’d like to go guarantor for sons home loan using the family equity loan and use a rural property that has an old church on it that has no loans attached . We spoke to commonwealth bank and they said we may not be able to use it as it dosent have occupancy certificate and then mentioned something about commercial .. loan or what i dont know.. any suggestions on how to help loan?

  • Unforunately this is the same answer that that all lenders will give, as they take security which is standard as support. A Church is a specialised security and as advised there is no occupancy certificate as you cannot live in a church.

    We may be able to find a commercial lender to assist however this is unlikely.

  • Sara B

    My husband is discharged bankrupt (discharged 7 months ago) we pay high rent & therefore have struggled to save deposits, if we had a guarantor (his sister) would lenders still lend to us considering his bankruptcy history & no deposit? We both work & can easily service a loan as we have with high rent.

  • Hi Sara,
    This is possible however it isn’t easy. There are a few options for you:
    – Buy the property in your name only, if you have a high income
    – Use a specialist lender that can consider your husband’s credit history
    – Wait until he has been discharged over 1 year and then there are more lenders available.
    Please keep in mind that most lenders require the guarantor to be your parents. Not all lenders will accept your sister as a guarantor. Your Guarantor must own a property in Australia to be accepted.
    Thanks and good luck!

  • Donna

    my husband and i have no deposit for a house. yet my mother is prepared to go guarantee for us as she owns her house. she is retired and on a pension with her husband who is on gold veteran card. is this possible

  • Hi Donna,

    Although most lenders require guarantors to be working or to be self-funded retirees, some of our lenders will accept your parents as guarantors. You and your husband will need to have stable jobs and a good income.

    Feel free to contact us if you’d like some more help. Thanks and good luck with your purchase.

  • Breanna W

    I don’t have deposit for a house but my mother is prepared to go guarantor for me. My mothers only concern is that she lives in a rural area (Merriwa, NSW) and thinks maybe she can’t be guarantor for me because of this reason. Is that true?

  • Hi Breanna,

    Merriwa NSW 2329 is considered to be a higher risk as it is a small town. You can check different locations using our calculator

    For some lenders this will be a concern, for others this will be ok. If she lives in town we will definitely be able to help. If her property is outside of town then it depends on the property size. If it’s under 50ha then it’s likely we will have a lender that can assist.

  • ben

    Hi, I have recently inherited a 2 bedroom apartment in hurstville nsw. I have yet to get my self into the property market and would like to use this opportunity to do so. I dont want to sell it rather use it as collateral, I have enough cash to cover stamp duty, would i also need a deposit to secure a home loan or could i use the apartment as security?

  • Hi Ben,

    That should be no problem. You can use your apartment as security for a loan to buy another property. You can borrow the full amount if you like, and put your cash sitting in the loan account so it is accessible if you need it later.

    What can catch you out is that some lenders charge you a higher interest rate if you have an investment property as security for part of your loan. I’m assuming you’re going to rent out your unit. However some of our lenders will give you home loan rates and a significant discount.

    Good luck with your purchase.

  • Jessica Woods

    Hello, I’m looking at entering the property market with my partner. We have enough saved up for 5% and my parents are happy to go guarantor for us. I’ve heard that they can only help us out if we are buying an existing property. Can they help us if we are looking to buy land and build from a land package or can they only help if we are buying an existing home?

  • ben

    thanks for the reply
    ok so to borrow the full amount of a loan at say 850k would this require my entire property being held as security or just a portion of its value?

  • Hi Jessica,

    A guarantor loan can be used for construction, however it needs to be set up correctly. I’d recommend that you keep your 5% deposit aside in case there are unforeseen costs during construction. Then borrow the full cost of the land and construction. When it’s complete you can put your 5% into the loan if you like.

    Where most banks go wrong is that when they do the land loans they don’t setup the guarantee in a way that allows you to build later. Our brokers know how to prevent this problem so just give us a call on 1300889743 and we’ll help you out.

    You may also like our page on construction loan tips

    Good luck with your build!

  • Adriane Standfast

    Hey, what is considered an acceptable income for one of these loans? As in what is classed as low and high income.

  • Hi Adriane,

    There’s no simple answer to that question as it’s all relative to your situation. That means it’s relative to your debts, number of children and age. You can use our borrowing power calculator to get an idea of how your situation is assessed by a bank

  • Mic B

    Can my mate who owns a unit be my guarantor?

  • Hi Mic,

    Almost all lenders require the guarantor to be your parents. One or two accept other relationships such as grandparents, aunts, uncles, brother, sister or a friend. So it is possible if your friend has enough equity in their property, but we’d need to do a full assessment to be sure.

  • Chris

    Hi, my name is Chris. My husband and i are looking into building a new home but have about $30,000 in personal loan and 19 credit enquiries on my credit file in an attempt to apply for debt consolidation and car loan. My husband has been unemployed for about 9months prior but now has a stable paying job and we are slowly making our repayments.

    My mother has offered to be a guarantor for us. She has a mortgage on a house worth $600000 and owes less than 100000$ on this. What are the chances we will get approved if we apply for this?

  • Hi Chris,

    It’s likely that you’d need to show a strong history of stability for us to help you to get approved. What that would mean is waiting approx one year so that your husband has a year in his job and you have no enquiries on your credit file for one year. The reason for this is that your credit score would be low due to the unsecured debt and number of enquiries.

    You could potentially buy now if your mother refinances her loan and increases it so that she can lend you a deposit. You could then borrow 80% of the property value and a couple of our lender would consider your application. The goal would be to refinance your loan in approx 5 years time and pay out the loan from your mother.

  • Sherie

    Hi. My name is Sherie. My husband and I are looking to buy an established home within the Northern Suburbs of Adelaide SA. I have worked for my current employer for just under two years. I started Permanent Part-Time and now full-time since January 2016. My husband is on incapacity payments from Department of Veteran Affairs since 2012. Total fortnightly income Nett $3282. We do not have any savings due to getting married in February 2016. My husbands Uncle that raised him has offered to be guarantor and has mortgage for his property in Alice Springs NT which is valued $350k. We are looking for a loan around $220k.
    My credit file is good and my husbands average. What would be our chances if we applied for the loan?

  • Noel

    Hi, my partner and I want to purchase our first home. We were wondering if it is possible to have 2 guarantors providing security from separate properties (i.e each of our parents being a guarantor). My parents property is worth 1.1M with approx 200k owing and her fathers approx 400k with 80k owing. We have both been in our jobs for over 12 months, myself being a member of the defence force have a service agreement of minimum 6 years. However we have little savings, due to joining this relationship with previous debt, however have already consolidated these debts with success and are on track to have them paid off by may next year. We are looking at properties listed at 450k-480k and were looking to mortgage 500k to be able conduct minor renos immediately and cover part of the upfront cost. Does this sound like something that is possible?

  • Keryn Lynn


    I am looking to purchase a property using my ex husband as a guarantor (he owns his house outright). I am a teacher and earn approx $1100 a week and have been in the same job for 2 years. I want to buy a property to the value of approx $370k and also want to consolidate around $35k in debt. I unfortunately have no savings. What are the chances of me securing a loan?

    Thank you

  • Hi Keryn,

    Technically this is possible however we would need to assess this on a case by case basis. It would be likely to be approved if the debts were all paid on time, that you are currently renting with a good payment history and you have a clear credit history. It would likely be declined if there were missed payments.

    While it is unusual to have an ex-husband as a guarantor we have approved some loans like this before where couples have had an amicable divorce and they are seeking the best outcome for their children. We will need to have an in depth discussion with your ex and potentially we will need a written statement from him confirming the circumstances.


  • Hi Noel,

    Yes it is possible to have two guarantees to support your loan, however it’s rare that we’d recommend it. While it’s common for both parents to want to be involved to be fair or for other reasons it actually just complicates things. I would recommend you just have one property owned by one of your parents to be used for the guarantee.

  • Hi Sherie,

    This should be fine. Few lenders will accept an uncle as a guarantor however we have a few options for this. Aside from that your situation looks like great.

  • Sherie

    Thank you. I have spoken with my husband about his credit file. We have requested a copy from Veda to see what we are up against. I will have to touch base in 10 days once he has a copy of his credit file

  • Carla

    Hi there.
    My husband and I own our apartment and are paying interest only on the loan for another 2.5 years ($412,000 owing until we begin paying principle+interest). We earn about $8500 a month with out current interest-only mortgage repayments being $1250/month and car loan repayment of $500/month.
    We have $40k in savings. We want to purchase a second property for around $650k (a family home – possibly buy land then build) and keep our current apartment as an investment which will get back $300-$350/week in rental return (?cover the mortgage repayments).
    My parents have offered to be guarantors for us and own their home which would be valued around $1.5m-$2m (they own it outright).
    With them being guarantors, would we be able to borrow the entire $650k and keep our current place and rent it out?

  • Hi Carla,
    Thanks for the detailed info. Yes we can assist with this. You can borrow the full purchase price plus stamp duty and keep your $40,000 in an offset account in case you need it later. We can also extend the interest only period on your current property as it is becoming an investment. It makes sense to pay off your other loans off first before paying off your current loan as it will be tax deductible.
    Please call us on 1300889743 and ask for one of our guarantor loan experts.

  • Carla

    Ok great for getting back to me. Would this still be the case if we chose to buy land and be owner-builders?

  • Very few banks lend to owner builders. When combined with a guarantor loan it’s even less. Some of our brokers specialise in owner builder loans however we find in most cases customers have significant problems with this type of construction so we’d recommend that you avoid it.

  • Emma

    I (24yo) am moving to Qld to live with my partner (25yo) and his parents later this year and we are considering purchasing our first home together next year, rather than renting. He is earning $800+ a week at his full time job, and I will have either a casual or part time job whilst studying. Depending on my earnings, I may also be receiving ‘living away from home allowance’ from Centrelink which is approximately $455 a fortnight.

    Being first home owners and naming our parents as guarantors, how high are our chances of being granted a home loan given our circumstances? Also, if possible, approximately how much would the repayments be on a $300k property?

    Thank you

  • Hi Emma,

    If your parents provide their property as additional security then the bank will be ok with you having no deposit. The main concern i your income. $800 / week isn’t sufficient to support a $300k loan and LAFHA isn’t acceptable to all banks. I would recommend that you seek a part time job as we can get this income accepted once you have started. Whereas many lenders want a 6 – 12 months history as a casual employee.

    You could buy the property before the move if your income is higher now. We’d need to assess your likely future income as well to make sure you don’t get into financial hardship when you move to QLD.

    P.s. I hope you enjoy the sunny weather :)

  • Emma

    Thank you so much for your advice :)

  • mjt

    Hi, I am 41, single and renting. I have $95k in super. no deposit, and about $27k in debt which includes a car. I would like to buy a home about $340k. I earn $73k per year and have recently changed employers. How can I get out of the renting and into buying?

  • Hi mjt,

    If you can show a perfect rental history, a perfect repayment history of your debts, that your income is stable and you have a guarantor who owns a property then we may be able to assist. However it is likely that lenders would have concerns over your ‘income to asset ratio’. They usually expect that by age 40 you’ll have savings or a house already. We’d need to answer that concern as well.

    Consider cutting down your expenses, making extra repayments on your debts, make sure you are on time with your repayments and then when your debts are paid off you should qualify for a guarantor loan. Small debts can be consolidated with a guarantor loan to buy a property with no deposit, in exceptional circumstances.

  • Damien

    Hi, looking to build a house with land looking around 400k. Married with kids I earn 110k a year and wife earns around 30k. Have debts around 54k. With a guarantor how much could we lend

  • Hi Damien,
    Yes this is a possibility. The main concern is your debts of $54k. If they are mostly car loans this is likely ok. If they are mostly credit cards then this will not be acceptable to most lenders. Please call us on 1300 889 743 to go through your situation in more detail.

  • Kara K

    Hi. My husband and I are looking to buy an established home within the Northern Suburbs of Adelaide SA. I have worked for my current employer for just under two years. I started Permanent Part-Time and am now full-time since January 2016. My husband is on incapacity payments from the Department of Veteran Affairs since 2012, with a total fortnightly net income of $3282. We do not have any savings due to getting married in February 2016. My husband’s uncle that raised him has offered to be our guarantor and has a mortgage for his property in Alice Springs NT, which is valued $350k. We are looking for a loan around $220k.
    My credit file is good and my husband’s is average. What would be our chances if we applied for the loan?

  • Hi Kara,

    It definitely helps that you have switched on to working full-time recently. However, not all lenders accept guarantor loans in lieu of less deposit. Similarly, there are a handful of lenders that accept incapacity payments.
    However, our brokers are experts in getting tough loans approved. I would recommend you to speak to one of our brokers to get accurate information based on your situation.

  • Z Blair

    At the moment, I am looking at buying a home to live with my mum. She has a property and she is looking to sell itsoon. Basically because of an unexpected circumstance, we have to both move from the rental property I am living in at the moment and I am checking to see if it is possible to get a home loan without a deposit instead of renting again.

  • Hi Z Blair,

    Yes, you can get a guarantor home loan using your mum’s property as additional security. When your mum sells her property, you can either remove the guarantee and pay off part of the home loan or you can leave some of the sale proceeds in a term deposit with the bank, which would be held as security instead of her property. When you pay the loan down, you can remove the guarantee over the term deposit and these funds are returned to your mum.

  • Kristal

    Hello, Can you use a guarantor loan for a home and land package?

  • Hi Kristal,

    Yes this is ok. For construction loans it is a little more complex but we’ve set up hundreds of them so we know what to do. Please call us on 1300 889 743.

  • Sam G

    My partner, C. and I have been thinking about purchasing our first home – a modest unit for +/-$150k.

    My parents have agreed to guarantee the loan – they are currently paying a mortgage but are 45 years old and still both working fulltime. Their last valuation estimated their house is worth $318k with a rough figure of $220k remaining balance.

    C. and I have been saving $300/fortnight into our joint account since April and currently have around $6000 in the bank.

    We also have combined credit card limits of about $15000 (although the balance on these are much less), and pay a total of $420/fortnight into our separate personal loans.

    We think we are ready to go forward, but are unsure what our first move should be. Do you think we would get approved? Would we be able to hold onto the majority or any of our savings, and apply for a deposit bond?

    Of course I appreciate that any advise you can offer will be generalized, but any advice you would be able to offer would be greatly appreciated.

  • Hi and thanks for posting.

    Yes we can help with this. You’ve got a savings track record, a history of paying your debts and stable employment.

    The minor issue is that for some lenders they may consider your parents to not have sufficient equity to be guarantors. This should be ok as they are working full time so they can likely set up a separate loan account on their property and lend this to you as a deposit.

    Please call us on 1300 889 743 and ask for a guarantor loan specialist. Once your documents have been sent to our broker then please ask them to ‘refer to Otto’ and I’ll assist with this personally as it can be a little complex.

    We should be able to help as long as your debts are relatively minor. Thanks

  • Bella


    My partner and I are wanting to purchase land and build a kit home most likely on it for probably roughly around $330k. We have a newborn baby so I am not working and haven’t been for a year now. My partner works two jobs and has about $6k debts from personal loans that we are currently paying off. Neither of us have such good credit ratings. I am about to do my Veda check because im not too sure if my old defaults on a phone plan and utility bill would still be on there from when I was younger. My partners father is willing to be a gaurantor and has fully paid of his house that is worth $550k. We have only about $3k saved atm after baby expenses and moving houses. What would be our chances at securing a home loan using a gaurantor? Thanks very much. Looking forward to your reply. Bella.

  • Hi Bella,
    Technically it is possible to obtain a guarantor loan however it may be best to wait until you are back working so that you are in a more stable financial position. We wouldn’t want you to struggle with the repayments and put your father in law at risk.

    If you can confirm a perfect rental history (on time rent payments) for the last 12 months we can consider your application now. We would require your father in law to be working (not retired) in this case. We would likely structure the guarantee in a slightly different way as two separate loans rather than as one loan over both properties. As this is complex it’s best if you call our broker team on 1300 889 743 on Monday and when you have provided all of your documents please request the broker to ‘refer to Otto for assessment’. I’ll then assess this personally and work out what the best options are.

    FYI building a kit home is possible under this structure as long as a licenced builder is used and the kit is paid for in stages via the builder. Many lenders would be ok with construction but not a kit home, so we’d just have to look at this on it’s merits and work out if this can be done or if you will have to go with another method of construction or buy an established home.

  • Rhian

    Do you offer low doc home loans with guarantor??

  • Hi Rhian,
    This can be considered on a case by case basis. In most cases, people are not eligible as we require more than the minimum for standard low doc loans.

    We would need comfort that your business has a stable income such as BAS statements or business bank statements. Also, we would want to see a 12 month perfect rental history.

    In most cases, your guarantor must be working.

    Alternatively, you can get a gift / loan as a deposit and borrow 80% with a low doc and then it’s not as strict.

  • Lucy


    My de facto partner and I are thinking about buying our first home. I have a PhD doctorate, have worked two years full time as a post-doctoral researcher at a university and earn $85k p.a. I have 18 months left on my contract but it is likely to be extended. My partner is studying his second degree in an allied health field. He works part-time in a disability support position (has been there 6 months). My parents will be guarantor (retired from teaching, however now run their full time farming business which they have had for over 20 years- they have no mortgage left on their house – worth over $1 million). Is it likely we could get a loan for about $400k?


  • Sam G

    Asking my parents to take out a line of credit wouldn’t be something we would be comfortable with…

    What is ‘relatively minor’?:
    Personal Loan 1: 30,000
    Credit Cards (combined balance owing): 15000/17000 limit
    Personal Loan 2: 12000

    Would lenders still take us on with our unsecured debts?

    Otherwise would we be better to continue saving?

  • Hi Sam,

    It’s borderline, we’d need to do a full assessment to be sure but I’d say best to pay off the credit cards as a minimum before applying. Make sure that you pay all your rent on time and all debts on time.

    A line of credit would work now but I totally understand if this is something you aren’t comfortable with.

  • Kelly

    Hi my partner and I are relocating to cairns next year. We are wanting to purchase a property before moving.
    Combined incomes of $104k before tax. We have a car loan of $300 per month and 1 dependant child.
    I am a discharged bankrupt due to a previous divorce but we have an aunty whom would like to guarantor for a home loan for a property up to $330k is it possible to do as a no depost home loan?

  • Hi Lucy,

    Yes that should be fine. If their farm is the property they are using as security then some lenders may not like this due to the land size, use (farming) or location. However we have a few options which should be suitable. Best of luck with your new home and also your research!

  • Hi Kelly,

    We can consider a guarantor loan with past bad credit however it is case by case. We have done a few before. The key is to see what evidence there is to show that you have excellent money management now. Some examples are a perfect rental history or perfect payments on your car loan.

    Some lenders would require your aunty to own 20% or so of your property in order for you to quality. Some would prefer your aunty lend you a deposit and then we can set up a loan for 80% of the property value on your property. If you call us we can work out the best option from there. Ph 1300 889 743.

  • amanda86

    Hi, my partner and I are looking to purchase our first home. I am working as a lawyer earning $70K a year, and he is self-employed. He has only been trading for 1 year and the business ran at a loss. I should have an excellent credit score, however i do currently have about $10K in credit card debts, on an interest free balance transfer.
    If we were able to secure a guarantee from my parents, would we be eligible for a loan without any genuine savings (we only have about $2,000), and we are looking to purchase a home for less than $200,000. I would be looking for a limited guarantee over my parents property.

  • Hi There,

    Assuming $70k income for you, $0 income for your partner and a $10k credit card you can afford $273,000 approx. We can help with your application however we may need some additional evidence around your husband’s business. There’s several options here:

    1. Evidence that although last year it made a loss, that it is currently trading at a profit e.g. accountants letter / BAS statement
    2. The loan to be solely in your name.

    You would know more about your husband’s business than I would. If the business is likely to make a loss in the next year then you may want to hold off on buying a house until you’re confident that it isn’t a risk. If the business is now past the expensive set up stage and is now trading profitably then it’s likely fine to buy now.

    Please call us on 1300 889 743 and one of our brokers can complete a full assessment.

  • Greg

    My wife and I are hoping to purchase a home. We have three kids and we have both previously owned homes, but are currently renting and comfortably manage to pay $320 per week. I am a teacher, earning around $70K after tax. My wife is a stay at home mum with 0 income. We have a credit card with an $8K limit.
    My parents are retired but own their own home outright and are self-funded, my wife’s parents also own their home but still have a mortgage and are still working. Both would be happy to act as guarantor if they are allowed to.
    We are looking at properties anywhere from about $300K down to $150K, we’re not too fussy.
    Every bank we have spoken to won’t go near us because we have one income and three kids, despite the fact we manage to pay rent and everything else pretty easily.
    Is there any chance of a loan for us?

  • Hi Greg,

    To calculate borrowing power we’d need to see your details in full. Firstly as a couple with 3 kids most lenders would assess your living expenses as approx $43,000 p.a. which leaves $27,000 to pay for a mortgage. Based on this you should qualify for $300,000.

    There are some lenders that can consider FTB A & B if you receive this as well. Also allowances, overtime and some other unsual pay types are accepted by some lenders but not by others.

    Please give us a call on 1300 889 743 and we can do a full assessment and work out what the best option is.

  • Greg

    I’m looking to buy my first home, my father was going to be guarantor for me but bought a new car, I don’t believe he has any equity on his home, so does that mean they won’t accept him?

  • Hi Greg,

    If there’s no equity then we can’t assist unfortunately. Some possible options are:
    – Call us with the loan amount and property value and we can confirm if it’s possible
    – See if other family members can assist with a guarantee
    – If you are buying with a partner then maybe their parents can guarantee your loan

  • Greg

    Just as I thought, the house I’m looking at is around the $280k mark, I have $13k in “non genuine” savings for a deposit

  • Great you aren’t far off having enough depending on the state that you’re in and the type of property that you’re buying. If you’ve got a high income you may qualify for using a small personal loan to top up your deposit. It’s not suitable for everyone but if you pay it off quickly it’s actually quite a good solution.

    Best to call us on 1300 889 743 to discuss. Also let us know the amount your dad’s property is worth and how much he owes. Thanks and have a great weekend

  • Bridget Hynes

    Hi there , we are looking to buy land and build our first home. My partner earns $87000 gross p.a, I currently earn $20000 p.a(part time work for now). We have 2 young children. A few grand in credit card debt, $20,000 left on a personal loan, renting for $480 per week for the past 5 years and never miss a payment for anything. We don’t have any savings. We want to loan up to $450,000, and use the left over to pay off credit card and personal loan. If we use a Guarentor can we loan this amount with no deposit ?? We know we can afford the repayments but What would we need to do about not having a deposit

  • Hi Bridget,

    Your perfect rental history and good income would mean you are likely eligible for a loan. It is possible to consolidate a small about of debt when buying a home if your repayment history is excellent and the amount you have suggested would normally be ok as well as buying a home with no deposit.

    Please be aware that construction loans + no deposit is a complex loan type and may take a little longer to get approved and the banks tend to ask more questions. So you’ll need to be patient with them! We’ve done this many times before though and it should be no problem.

    If you complete this form we can complete a full assessment of your situation

  • Hailey Mattsson

    Hi guys,
    we bought land with the intention of building, and now our plans have changed.
    We have a loan for the land, and are now looking to sell it in approx. 6 months.
    In the mean time, we’ve found a great established property we would love to purchase.
    The land loan is $294,000; market value $450,000
    The second property is $370,000.
    I have approx. $18,000 in the bank which I was hoping to use towards our wedding, however could put it into deposit if I can take additional to cover the wedding costs..
    Would we be able to use the equity in the land to cover our deposit needs so I don’t have to spend our wedding money?

  • Hi Hailey,

    Yes you would have sufficient equity in your land to buy the new home now, although you’d pay a small amount in LMI

    Depending on the timing of your wedding you could refinance your land and use your savings towards your new home now so that you avoid paying LMI. Then when you sell your land you’d have plenty of money for your wedding.

    Another option is to use a guarantor loan to buy the property using a guarantee from a family member. Then when you sell the land you could pay down the loan to be less than 80% of the property value and remove the guarantee. Please complete this form and our brokers can complete a full assessment for you

  • Paul Spiers

    Hi we are considering a development using a discretionary trust (my wife and i, sister inlaw and husband and mother and father inlaw). Parents are retired but the other four have good income. Can we borrow $750000 to build 4 units, rent $1120 wk end value $960000 using parents home as security $420000.

  • Hi Paul,

    Thanks for posting. We love a challenge and this is a bit more complicated than most.

    It is possible to do this however your inlaws would need to have a beneficial interest in the development. In other words if they are guarantors but do not receive any of the profit then this wouldn’t be acceptable to our lenders. Whereas if your inlaws have ownership in the development then this would be fine. The easiest way to do this is to have them as beneficiaries of the trust.

    Construction of up to two units is fine as a residential home loan whereas construction of four units is typically considered to be a commercial loan. We can work with this, just when you apply ask for a commercial loan specialist.

  • Darren Steinert


    We are looking to buy a house in Perth and will be needing my mum to go guarantor. Its a tentative question we will be asking her as she’s kinda half glass full persona nd always sees the risk in everything.

    If she says no, what are our options:

    Me: self employed with taxable income of $0 but gross over $105k (2 cars claimed against income)
    My Wife: Gross $45k but is currently earning $600-700 commission net per month 2 months into her job.

    Currently paying $480/wk rent and the price range a broker has given us (high 200k- low 300k) would make the repayments approx $310-$330/wk

    What would we be looking at, savings required, income assessment….genuinely worried but def know we can cover the repayments and some if we can get someone to lend us the money!!


  • Hi Darren,

    If your mum says no to being a guarantor then best to work hard to save a minimum 5% deposit and show a higher income in your tax returns then you should qualify.

    We can do a low doc loan with a guarantor however it is an exception to normal policy. We’d need to discuss with your mum in detail, we’d need to see a strong rental history and perfect payments on all of your debts. The main thing for us is that we need to see that there is a strong income there and that you can afford the debt, this is in addition to the policies of the lender. Basically what that means is that we can potentially assist. Best to have a talk to your mum first to see if she is comfortable helping you out.

  • Crystal


    My partner and I have been renting for 6 years and live in Queensland. Can we have a family member go guarantor if the house is in NSW?


  • Hi Crystal,

    Yes your guarantor can be interstate and this is no problem. You can also buy a home to live in or an investment property in another state as well. As long as it all makes sense the location of your property and the guarantor’s property isn’t a major problem unless they are very remote. Even then we have a few lenders that can work with that too.

    Best of luck!

  • Craig


    My partner and I are eager to purchase a house through using my partners parents as guarantor. We net approximately $140k p.a with one sibling and approx $80-$90k in consumer debt.
    The in laws, however, are looking to sell their property that they own outright (in a town that could take anywhere up to or beyond 2+ years to sell), and buy again, but they are hesitant on supporting us because guaranteeing us would prevent them from selling their home. Is this correct?
    Alternatively, is there a personal loan of sorts that would allow us to consolidate all of our consumer debt into one easy to manage loan, which may help with assisting us on saving for the required deposit?

  • Hi Craig,
    Your partner’s parents can still guarantee your loan. When they sell they retain some of the sale price in a term deposit and this term deposit is held as security by the bank. When they buy then the term deposit is used towards the new purchase and the guarantee can be moved onto that property. There’s a couple of other ways to do this as well.

    The location of your partner’s parents property may be a concern for some lenders. We have some lenders that can accept any location however they aren’t always best for guarantor loans.

    $90k in consumer debt is a concern, it would depend on the type of debt as to if this is a problem or not. If it’s mostly car loans it should be ok. If it’s mostly credit card debt then this wouldn’t be acceptable to the banks. The banks worry that you may be living outside of your means if you have a high amount of consumer debt. We’d need to do a full assessment of your situation to see if this is ok.

  • Laura Henao


    My partner and I are looking to purchase home and land package in south west Sydney within the next year or so.

    He is signing a contract for $65k after tax this month for a period of 2 years. I earn about $20-22k per year working part time, with the prospects of moving on to full-time once I graduate.

    We estimate we can save about $30k in the next 6-8 months for a deposit.

    I am re-paying a loan of $15k and have a $3k credit card ($0 outstanding balance)

    He is re-paying a loan of $10k and has a $10k credit card limit ($0 outstanding balance)

    We have no dependents.

    Would it be possible to get a loan for around $560k mark with that criteria?

    Or would it help if we had a guarantor for the loan such as his parents? Issue is they are planning to sell and relocate overseas within the next 2-3 years.


  • Hi Laura,

    I did a quick borrowing power check and the amount you need may be possible depending on your personal loans, the size of the payments and if we can consolidate them or not.

    You can apply now with a guarantor loan using help from your parents and then work hard to repay $50,000 + off of the loan before they sell their home. You can refinance out of the guarantee as long as you owe less than 90% of the property value so we’d just need to do the math and ensure that you can make the higher payments to make this possible. OR the bank can hold some cash in a term deposit from the sale proceeds of their property and the guarantee can be secured on this. There’s a few options.

    $30k in savings wouldn’t be sufficient in most cases.

  • Fiona

    My partner and I are looking to purchase a home for roughly $650,000. Our combined income is 143k. My father has agreed to guarantee us for the deposit against the family home but I am just wondering if it will work as he is only on a 4 year contract at work? It just got renewed. Also my partner already owns a home, will they allow us to get a guarantor loan if this is the case?

  • Hello Fiona,
    Yes your father being on a contract is acceptable (not to all lenders, but to enough) and your partner already owning a property is also acceptable, I assume he’s going to rent it out and we can include the expected rent income in our assessment.

    There’s a few other things to consider such as if your father is a self employed contractor or PAYG and if he has a loan on his property already or not. Our brokers can assess this over the phone pretty quickly. Please call us on 1300 889 743

    Good luck with your new home.

  • Craig

    Hi, can you have multiple guarantors on one home loan? Our situation is, is that the in-laws are willing to go guarantor, however they are at a stage of their lives that they don’t want to over commit based on “what ifs” – which we respect. They suggested, in fact they offered to approach another family member to assist in halving the responsibility, so to speak.

  • Hi Craig,

    This is technically possible but in reality it doesn’t really work. Usually it means both guarantors taking the full liability so it’s actually worse. Best to keep it simple and reduce the risk to the guarantor by taking out income protection insurance and making extra repayments so that you can remove the guarantee as soon as possible.

  • Gabbie

    Hi, I’d like some advice. I am separated and my ex is currently paying of my 3 bedroom apartment owing approx $100,000 (it is valued at $560,000). I am studying full-time and expect to graduate in 2019. I have two children and am on parenting payment, family tax a and b and earn approx $100-200 week working casually. Late 2017 I will be able to begin working 2 days a week, earning approximately $700 pw. I am not yet sure what child support will be but my ex earns approx 80k and we have an amicable separation.

    I am very keen to sell my apartment and move in to a house or townhouse but these cost around $750-850,000 in my desired area. Thus I would need to borrow at minimum $300,000. I do not have any other debt but I do have a credit card limit of approximately 18k – I always pay my credit card off every month so never incur interest. I want to know whether there is any way I could get a loan if my mother agreed to go guarantor. She is a pensioner but owns her home (value approx 570k). I’ve seen that repayments on a 300k loan would be around $1200 per month. That is doable based on my current situation and a lot cheaper than if I attempted to rent my place out and move into a rental house myself. Or do I need to wait until I have a permanent part-time position? I wish I could work full-time but this just won’t be possible until end of 2019.

    Another option is to ask my ex to co-sign the loan but I’d prefer not to do that. It would be great to know what is the minimum amount I would need to earn per year in order to service a 300k loan myself with two dependents (shared care with ex), and for how long would I need to have done so. Also does this need to be income from work or can it include any centrelink benefits, child support?

  • Hi Gabbie,
    The key for your situation will be the child support support income. If you have a signed agreement with your ex that is registered with the Child Support Agency and have bank statements showing the payments then this can be included. The lenders that accept this income require 3 – 6 months history of payments going into your account. Make sure that they’re regular and on time!

    FTB A & B, parenting payments and casual income can all be used as long as it is consistent and you have been working in your role for over 3 months.

    Your mother being a guarantor won’t help as you have plenty of security already and she doesn’t have a high income. Your ex could co-sign for the loan if he was a part owner of the property (>10% share) however this would complicate your situation so it would be a last resort.

    To calculate your borrowing power we’d need to see your payslips and full documents as it’s a complex situation. I’m not sure if receiving child support payments would affect your entitlements to the other benefits you are receiving.

  • Gabbie

    Thank you. It sounds like I need to wait 6 months in any case to build up a history of earnings/child support. I will be in touch once I have these records. Thank you for your prompt advice.

  • Hi Gabbie,

    I’d recommend that you contact our Prepare To Buy team and they can do an assessment to work out what you need to do to be qualified. They’ll then check in on you every 3 – 6 months to see how you’re going and when you’re ready to buy they’ll put you in touch with a specialist mortgage broker of ours.

    It’s a free service we offer. I’ll email the details to the email address that you’ve used to register for these comments. Best of luck with your purchase!

  • Harold

    I’d like some quick advice. I’m between 25-30 yrs old.
    I earn $140K year for last 6 months and have a stable full time job.
    I have credit card debts of $35K, which was used to purchase a car by using multiple balance transfers with 0% interest.
    I have savings of $15K.
    I live with siblings and pay board of $200/week, thus no rent contract.
    I’d like to apply for home loan property value of up to $400K within the next 6 months.
    My parents own a home worth $600K (no mortgage).
    1. Can I apply for home loan using guarantor home loan.
    2. Do I need to have a deposit?
    3. Thirdly, is it better pay credit card off ‘slower’ so that I can save more cash within next 6 months (and then consolidate credit card debt into home loan), or pay off credit card faster now but save less cash in 6 months time?
    Thanks in advance for your time and advice.

  • Hi Harold,
    Thanks for posting, the info you’ve provided is really helpful.

    1. Yes you would qualify for a guarantor loan now assuming everything else is ok regarding your situation.
    2. No you do not need a deposit.
    3. Overall there would not be a major difference from a lending point of view, if you had no credit card debt there would be more lenders who can approve your loan. I can’t give you financial advice regarding which is better.

    You’d qualify to buy now and to consolidate your debt into the home loan at the same time. So it’s really up to you when you want to proceed. Although paying off more of your credit card debt would mean more lenders can assist, considering that the rates you can get now are still market leading I don’t think it matters. Just buy when you are personally ready to take the plunge.

    Btw very clever to use multiple balance transfers to buy a car. This is a strategy that few people know of and even fewer pull it off successfully. With a good income and credit history this can sometimes be very effective and give you a long period with no interest paid.

  • Harold

    thanks for the advice, now gives me extra confidence speaking with the banks.
    Regarding the car purchase thru credit card and balance transfers, I had to do alot of reading and research online to see if it can actually happen.
    It was tricky to pull off and had to be coordinated in a timely way.
    I also had to reduce the fees with the car dealer as best as I can after negotiating the car price. Worked out in the end with essentially 0% interest, however I’m concerned that this credit card debt would hinder my chances of obtaining a home loan. I’ll see where I end up with the banks in a couple weeks time.

  • Hi Harold,
    As mortgage brokers who specialise in guarantor loans we can quickly give you a few options that you qualify for and that have a great rate. We don’t charge any fees except for short term loans and we’ve won numerous awards. If you’d like our help then just fill in this form and your enquiry will automatically go to one of our guarantor experts

    You can read some testimonials from our past guarantor loan customers here

  • Dee

    Hi, Can you please give me some advise. I’m self employed and a single mum with 2 kids under 18 in Sydney. I don’t receive child support off my Ex husband as he’s not working. I currently pay $680 a week rent. I do receive family tax benefit etc from Centrelink and a reduced parenting payment (which stops in Jan 2017). My parents own their own property outright but it’s in a country area of NSW (not sure how much it would be worth?). Being self employed on paper my income doesn’t look huge. What are my options 1. on my own OR 2. my boyfriend has a home in Sydney that he currently lives in. It’s worth about $700,000 and he owes about $400,000. If we were to decide to buy together would he be better off renting his house (he could get about $680 pw) and borrowing against the equity or selling it? Again on paper I don’t look great financially so how would we go? His income is around $80,000 pa. :-)

  • Hi Dee,

    Thanks for letting us know about your situation. We’d have to see the full details of your situation to be sure, but likely best to buy with your boyfriend. You could either use the equity in his home for the guarantee or you could use your parent’s home for the guarantee depending on the value and location of your parent’s home.

    Please give us a call on 1300 889 743 and we’ll complete a full assessment.

  • joanne

    Would it be possible to obtain a land loan first then choose your own builder with a garantor ‘construction’ loan, or another loan where this option would be offered?
    As we’ve located a block of vacant land surrounded by already built homes in the area we’re currently renting in now. ( sydney south west)

    House and land packages in our surrounding area’s seem to be more hefty if you buy it like that,
    (approx $750k) opposed to our idea which would be
    -( $410k for the land, $260k for fixed price tender) with a licenced reputable builder (project home builder) etc.

    Parents are going garantor,
    We are 1st home buyers,

    Not really familiar on how anz or banks etc feel about it although id assume its quite common?
    Thanks for any help!

  • joanne

    Should advise that parents have no mortgage, and own 2 homes outright.

  • Hi Joanne
    Yes you can do what you are proposing with a guarantor loan. It’s a bit complicated to set up. The key point is that the full sized guarantee for the on completion property needs to be set up at the time you buy the land otherwise you’ll have issues when you build.

    Please call us on 1300889743 on monday and we can do a full assessment work out which banks including ANZ can offer you.

    Btw the cost of construction seems very low, I’d check the schedule of finishes and inclusions to make sure the finished house is what you are expecting. Best of luck

  • joanne

    Thanks so much for your reply!
    The build is based of figures listed on the website ‘IBUILDNEW’
    not sure if you’ve heard of it.

    Basically every reputable builder listing home designs with all inclusions etc from a specific price.

    We want just a comfortable home. Nothing flamboyant or too costly etc.

    In that price ive actually estimated more for a contingency plan etc .
    Otherwise it starts from $220k.

    Anyhow. We actually had a broker come out 2 weeks ago
    (Family friend)
    Although from recollection, not sure he thought it was a good idea.
    Cannot really remember.

    Why would it be more difficult this way?

  • It’s difficult as it’s actually two loans. One for the land and one for construction. Each loan is also secured by your parents property so it ends up being 4x more complex than a standard home loan. Bank systems arent set up to handle it so it takes a lot of skill to get the loan set up for you. Talk to your If current broker and if they can’t assist then give us a call and we’d be happy to help.

  • joanne

    Thanks for the clarification!
    I see now how more complex this route may be/become.

    We may just be better off going with a all in one H&L package.

    If circumstances change,
    We’ll be in touch!
    Thanks so much for your time

  • Usually a H&L package is still a construction loan. If you want to avoid it then just buy an established house.

  • joanne

    Hmm. We would prefer to buy a H&L package in order to recieve the FHOG but wasnt aware that buying a package home etc would be as difficult as buying land 1st then building wtc. The broker said that it would more than likely be easier to buy a packaged home rather than finding land then building if we found our own builder . Im so confused
    Plus we’d essentially save money by paying stamp duty on the land only.

    Still awaiting his email.

  • You’ve got four choices:

    1. Buy an existing property (no grant in most states)
    2. Buy a newly built house (receive a grant in some states)
    3. House and land package which means you are signing to buy land and go with a specific builder (receive a grant in some states)
    4. Buying land and choosing your own builder (receive a grant in some states).

    A house and land package has the same problems that a normal guarantor + construction loan has. It’s just easier because you don’t have to look around for a builder. Hope that helps.

  • joanne

    You’ve been very helpful, thank you!
    May i ask if my situation is common? Like, do banks generally help people in my situation out?

    Would hate to get our loan rejected and it stays on our file?

  • Yes it’s quite common. Your situation is fine and getting approved isn’t the issue, based on what you’ve said you should be fine. It’s more a matter of bank systems not being set up to handle construction + guarantor and so inevitably there are delays and complications which you may find frustrating.

  • joanne

    Oh ok. Would you think ‘home loan experts’ such as yourselves be able to help us achieve this?

    If so, i feel like i may give you guys a call tomorrow

  • Yep we’ve helped a lot of people do guarantor + construction. You can have a read about some of our customer’s experiences here

  • Bel Gade

    Hi, just wondering what the income conditions are for a guarantor loan, starting a new job and will be on 6 months probation, is this an issue?

  • Hi Bel,
    That’s ok we have some lenders that can do a guarantor loan while you’re on probation. The main thing is for you yourself to be comfortable that your income is secure or to have funds on standby in case your probation isn’t extended. I’d recommend that you have a talk to your boss to make sure they’re on the same page before you apply for a loan. We’ve written a page on getting a home loan while on probation that you can find here

    If you’d like our help then please complete this form

  • Bel Gade

    Sorry I meant to write that my partner was starting a new job not myself. My Dad will be his boss so I’m fair certain his probation won’t be extended it’s just a formality. How do I work out what the repayments would be?
    Have completed the form, just awaiting a call back, I just got a bit impatient and tried calling but no answer.

  • Bel Gade

    Sorry also want to add, pretty much no deposit at the moment, baby #2 on the way and my partners mum is willing to go guarantor too

  • Hey congrats! Ok if probation is not an issue then that is fine. We’d just need to make sure you can manage the repayments and having a second baby, otherwise it’s best to delay buying a home. Alternatively we can set up the loan so you have cash on standby so while you are looking after your kids you aren’t under any financial pressure.

    Best of luck. Someone should call you tomorrow.

  • Bel Gade

    Thank you, that does sound perfect, the sooner the better as a newborn and toddler will be sharing a room at this point, which we’d like to avoid completely if possible or at least reduce the time. Patiently awaiting the call :)

  • Michael

    Hi, my partner and I are looking at buying our first home, by way of a house and land package, we were actually planning to do this around this time 2017 when I have my debts paid off, but have learned it might be possible to do something earlier.

    Our current situation is that we have a combined annual income of $91000 gross, (50000/41000 split) I have a good credit score, with a $6500 personal loan balance (10months remaining), a $3400 credit card (plan in place to have paid out end of June) and $1500 to pay out a rent to buy contract (paying out end April) my partner has a fairly new credit file with a higher end of average score, a $17500 personal loan balance, no credit card and $6500 to payout a rent to buy contract.

    I do have 3 children from a previous relationship, youngest being 7, but don’t have them full time and I pay child support fortnightly.

    My parents are happy to go guarantors.

    Do you think we would be in a position to do something now? I have heard the the first home buyers grant maybe ending in 2017, we are in Queensland.

    Many Thanks in advance.

  • Hi Michael,

    It may be possible for you to buy if your debts are no more than 5% of the purchase price and your parents are happy to have your debts consolidated into the guarantee. You’d need to pay off some of your debts first as the number of debts is important. Typically no more than four debts are allowed. To be able to consolidate debts we would need to see that your parents either have superannuation or an income that would enable to them to pay off the guarantee in the event of financial hardship.

    Also you’d need to buy a new property rather than build a house as construction + debt consolidation + guarantor is unlikely to get approved.

  • Andrew Maclean

    Good afternoon, my partner and I are considering going into an investment property with my parents. My parents will contribute 50% in cash and we have sufficient borrowing capacity to borrow for the remaining 50%. As my parents would like be on Title I was wondering what the best way would be to structure our purchase. Would having my parents as guarantor be an option?

  • Hi Andrew
    Yes we can do this. It would be structured as follows:
    – Andrew + Partner are borrowers
    – Parents are guarantors
    – 25% owned by each person as tenants in common
    Not many lenders do this but we have some that will do a great rate below 4% and will accept this structure. Your parents may be required to get legal advice due to the nature of the structure. But aside from that it should be pretty easy.

    If you can please complete this form and paste the strucuture I put above in your notes at the end then one of our guarantor specialists will take care of this for you.

  • Steven

    Hi there,

    My partner and I are looking at buying our first home. We have 2 toddlers age 4 & 2. Our financials are:

    Gross Income $151,500 (86500/65000)

    Personal Loan $21k
    Car loan $15k
    1 credit card @ limit $9k owe $8k
    1 credit card @ limit $6 owe $3k
    1 credit card @ limit 3k owe $0

    Savings $8k

    We have my parents that could go guarantor if needed but would rather not if possible.

    We are both first home buyers and live in Vic.

    We have a suburb picked that we would like to build house and land package and were quoted $520k but need $13k-$27k for land deposit. Would consider buying established if possible.

    Would also like to consolidate if possible for better cash flow.

    We have spoken to three mortgage brockers all with different views and now totally confused. Can you help?

  • Hi Steven,
    Yes most mortgage brokers are either not experienced with guarantor loans or they make a recommendation based on what they would do rather than based on your requirements and objectives.
    We’d need to have a discussion to work out which direction would work best. However guarantor + debt consolidation + construction is a combination that may not work. If you buy an existing property then this is very likely ok, we can roll your debts into the home loan and it would be smooth sailing.
    Our brokers would need to ask more questions about your parent’s situation and a few other things before we could confirm this is the best way to go. Please complete this form and we’ll call you to discuss your options.

  • Jess

    My partner and I are hoping to buy our first home but are unsure if we would be considered in a good position to start looking/seeking advice. We currently have $26k in savings. My partner started his own plumbing business this year and I receive work through an agency. We have earnt approx $80k (before tax) between us since July of this year (myself @ $60k- but 20% of my earnings go to my agency as commission). My parents are happy to go guarantor. We aren’t sure on our borrowing power since we both aren’t on salaries. My partner owes $3k on a car loan, and I have about $15k on a Hecs debt- no credit cards. We are very new to this and have no idea what our options are/ what our borrowing power would be!

  • Hi Jess,

    You can input this information along with a few more details into our borrowing power calculator for an accurate estimation of your borrowing power. Once the result is calculated, you’ll also find tips that can be helpful to your specific situation. You can then directly enquire online and have one of our mortgage brokers look into it and find out what options are available. Here’s the link to the calculator:

  • Jane

    HI – I’m hoping you can help or guide. My partner and I, both in mid 40’s and due to a number of reasons, are looking to purchase a home in the near future. We have a 6 year old son. We currently have a combined earning of $240K per annum. We have no credit cards, however there is one debt being paid off to finance totalling $2.5K and it is likely I have a mark on my credit history. With an Uncle as a guarantor, would it be possible to move forward?

  • Hi Jane,

    This would be a case by case situation. It’s not impossible, we recently did a guarantor loan for someone who had a default by providing additional evidence around the default and what happened. We can defintiely help if your uncle borrows on his property and then lends this to you as a deposit. It’s effectively the same thing, just a different structure.

    I’d suggest you give us a call on 1300 889 743 and ask for Thigee as she is very experienced with scenarios like this.

  • Kris

    Please help. Losing our home due to a redundancy is starting to cost me my marriage as my husband has not been able to accept having no roots and no house of our own. We have a pretty good combined income ($220000) and we have over $750000 in super, we have a clear record of home loan for 20 + years, we have a good rental history of 4 years BUT we have NO deposit and credit card debt. My parents are elderly and own a home worth about $800000 in the current market with about $120000 loan still owing. Is there anything we can do to get ourselves back in the Sydney market where the lowest house price is about $900000??? We cannot buy a unit as we have dogs and we are in our mid 50s. Please help.

  • Hi Kris,
    Potentially you would qualify for a guarantor loan however if you’re not in a stable financial and emotional state at the moment then it’s best not to add strain to that by buying a house and having your parents guarantee the loan. It’s best to get everything sorted and then consider buying.
    Our head office is in Sydney so if you like you and your parents can come in and one of our brokers can explain how a guarantor loan works. If you have $750k in super then the risk is relatively low, if you’re in financial hardship you can access your super to pay off the guarantee. It’s more about your parents peace of mind and if they’d feel comfortable guaranteeing your mortgage.
    You also need to consider paying off the loan before retirement age. Depending on the bank this is anywhere from 65 to 75 years old. So assuming you can work for another 20 years your super should be more than enough to prove an exit strategy for the bank

  • Brett

    Looking for some information please. Currently we have a 380 k loan on our home valued at about 430 k in perth .We would like to buy something bigger for about 700 k and retain our current home as an investment property and rent it out . A parent is happy to go guarantor as we only have about 20 k for the deposit of the new home . I understand it is not easy to get a guarantor loan on a second property but thought I would see if there is any possibility. We have a perfect credit history and earn about 180k before tax combined.

    Any advice is greatly appreciated .

  • Hi Brett
    Thanks for posting.
    If your current home loan is not a guarantor loan then no problem.
    If your current property is s guarantor loan then you’re right the banks are not a fan. We’ve been able to get exceptions in the past so if you send us the full details we’ll let you know if it’s possible. Id expect given your credit and income we’d be ok.

  • Amanda Manning

    Good morning,
    Looking at our options, if we have any.
    We bought a house to live in then had to move to another city. We turned the first house into an investment property. We bought our second house in the new city. My husband got a transfer for work at another city. So we now have two investment properties. The first property is worth about $440,000. We have a loan for $250,000 on it and a smaller home loan of &87,000 attached to the property. Since the bank made the loan contaminated with redraws and repayments, we needed to split the loan. The second house was purchased for $475,000 and we owe $418,000 on it. For the last 6 months we have been staying at my Nanna’s house in a new city. The problem is, she wants her house back and we now have two cats,a small dog and big dog. We are searching for a place to rent but it is unlikely anyone will rent to us. Our first house is being rented for $410 a week and the second house is rented for $440 a week. We can’t sell the properties at the moment. We have over $100,000 in super, and my husband is now a sole trader. We don’t currently have a deposit. He brings in about $1,000 a week. I’m currently not working as we are still settling into the new city with our 2 daughters. We were only looking for a loan of $250,000 to $350,000. Do we have any options? If we can’t rent, or buy, we will be stuck without a place. What steps or goals do we need to look at? Is a guarantor an option?

  • Hi Amanda,
    If your husband is on $1,000 per week then even with the rent income it’s unlikely that you can afford to buy just now. You can afford todays rates however banks assess your loans on a higher assessment rate, typically 7.25%. You may be eligible for FTB but still this would not be enough.

    If you begin to work then it’s likely that you will qualify. A guarantor loan will help in that you won’t need a deposit however this may not be required as you have some equity in your first property. Your income is the main hurdle so this is what you should focus on.

    Hope it all goes well for you.