What most banks think

Struggling to save up for a deposit in today’s property market?

You’re just one of many young Australians in the same boat and you too have probably thought about asking someone to act as guarantor on your mortgage.

Banks are very specific about who they’ll accept as guarantors but there are ways to get around this requirement with some lenders.

Who is an acceptable guarantor?

Most banks will only allow parental guarantees i.e a guarantee from the borrower’s parents.

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

If someone other than your parents is your guarantor, there are some specialist lenders that can help but you pay a premium to get approved.

Please call us on 1300 889 743 or complete our free assessment form to discover how we can help you qualify for a guarantor loan.

What is the eligibility requirement to be a guarantor?


They must be at least 18 years of age.

Guarantor property must be in Australia

Banks won’t accept a property located overseas as security for your home loan.

They need to be an Australian or New Zealand citizen, however, some lenders will accept guarantors that are living and working overseas.

It’s not uncommon for people later in life to move overseas and keep their home in Australia as an investment property.

Please complete our free assessment form to speak with one of our mortgage brokers.

Legal advice

Your guarantor needs to be of sound mind and will need to seek both legal and financial before making the decision to act as a mortgage guarantor.

Sufficient equity

The guarantor needs to either own their property outright or owe less than 80% of the property value on their mortgage.

There’s no hard and fast rule with this just be aware that the less equity you have to work, the harder it will be to borrow 100% of the property plus costs, avoid having to pay a deposit and avoid genuine savings.

Must currently be working

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

Not all lenders are the same!

Your guarantor can be a self-funded retiree or even on the pension (if they’re over 65 years of age) as long as they obtain legal advice prior to signing the loan offer.

They also need to present a solid exit strategy to the lender.

What if your guarantor doesn’t qualify?

In some cases, your mum and dad won’t be able to act as guarantors on your mortgage because they don’t have enough equity in their property or they’re close to retirement.

Other times, parents may simply not be comfortable in going as guarantor. It’s nothing personal (probably) but don’t worry!

If you don’t have a deposit, there are other no deposit solutions available to you including using a personal loan or asking your parents for a non-refundable gifted deposit.

The third option is to buy a property with a friend. This is where you both go together on the mortgage under a co-borrower or co-ownership investment loan.

In this way, you split the deposit and genuine savings requirement in half, get into the property market sooner and you can both reap the rewards of property ownership.

Want to know more about guarantor loans?

Check out the guarantor loan page for more information.

After that, give us a call on 1300 889 743 or complete our free assessment form to find out if you and your guarantor qualify for a no deposit home loan.

  • Annabelle

    Is it possible to get a 100% land and construction loan with the help of a guarantor?

  • Hey Annabelle. yes, you may be able to borrow 100% of the land and construction costs with the help of a guarantor. However, many lenders do not allow “loan increases” on guarantor loans so if you buy the land and then apply for the construction loan later, it may be declined.

  • Shade

    My parents live and work in NZ. Will they qualify as guarantors if I buy in Australia?

  • Hi Shade,
    They can only be a guarantor if they own property in Australia. If they only own property in NZ then they can refinance their home, release equity and gift or lend this to you as a deposit. You can read this page for more info https://www.homeloanexperts.com.au/genuine-savings/

  • Suzie Willis

    My parents are retired and living off their super, they own their house – are they able to act as guarantors?

  • Hi Suzie,
    Yes some lenders will accept a retired guarantor who are living off an allocated pension from their super fund. If you’d like our help then please contact us https://www.homeloanexperts.com.au/free-quote/

  • Sarah Veness

    my dad and step mum have just agreed to go guarantor but only bought a house together 4 years ago and im not sure if they have more then 80% still owing… if they do are they inelligible as guarantors or can they still guarantor some of the loan?

  • Hi Sarah,
    You can use our guarantor calc to see if they’re eligible https://www.homeloanexperts.com.au/mortgage-calculators/guarantor-loan-calculator/
    If they don’t have much equity then in most cases the easiest way is for them to do a small loan increase and then lend this to you as a deposit. You can then get a 90% or 95% loan on your own https://www.homeloanexperts.com.au/genuine-savings/borrowed-deposit-home-loan/

  • Misty Bee

    Can a trust company act as guarantor?

  • Hi Misty
    Yes this can happen but it is an exception to policy and it is rare.
    In the past we’ve done a couple of applications where the parents owned investment properties in a trust and their son / daughter wanted to buy a home using a guarantee from their parents.
    Please call us on 1300 889 743 and ask for Daniel as he’s trained in this.

  • Alexandra Cervantes


    Can i be my own guarantor with my investment property, rather than getting an equity loan?


  • Yes Alex we can help with this. The legal structure is slightly different as you would technically be a borrower but we would set it up with a mortgage over your other property just like a guarantor loan.
    Please call us on 1300 889 743 and ask for a guarantor loan expert or an investment loan expert. Either can assist you.

  • Ella

    Hi, I would like to get a home loan with my dad as my guarantor but he only speaks Italian so I’m not sure how to explain it all. Can you guys help me with this?

  • Yes, we have dealt with such situations before and we know how to deal with this. Please note that prior to settlement, the guarantor must seek independent legal advice from a solicitor who speaks Italian. You can call our office on 1300 889 743 or enquire online through the link below to discuss in detail with one of our mortgage specialists:

  • Kerry Rhodes

    Does the guarantor have to go on the loan?

  • Hi Kerry,
    The guarantor is a signatory to the loan agreement. They are not required to make repayments unless the borrower is unable to do so.