A family guarantee uses your parents' (or family member's) property equity to boost your deposit — often eliminating the need for LMI and letting you buy with as little as 0-5% saved.
The Australian property market doesn't slow down for savers. Every year you wait to buy is another year of renting, another year of rising prices, and another year further from home ownership. For many first home buyers and young professionals, the deposit gap is the single biggest barrier to getting started.
The good news? If a family member is willing to help, a guarantor home loan can bridge that gap — without them handing over cash or making loan repayments.
Saving a 20% deposit in today's market can take years — and property prices don't wait:
A family guarantee uses equity in a family member's property to secure part of your loan — typically the amount above 80% LVR. This means no LMI and potentially no cash deposit required. We structure guarantees to minimise risk for both the borrower and the guarantor.
A guarantor loan isn't the only way to buy with a small deposit. Here's how it compares:
| Feature | Guarantor Loan | Govt Guarantee Scheme | Standard LMI Loan |
|---|---|---|---|
| Deposit Required | ✓ As low as 0% | 5% minimum | 5% minimum |
| LMI Cost | ✓ $0 — no LMI needed | ✓ $0 — government guarantee | ✗ $5,000-$30,000+ |
| Income Limits | ✓ No income cap | $125K single / $200K couple | ✓ No income cap |
| Place Limits | ✓ No cap — available anytime | ✗ Limited places per year | ✓ Always available |
| Property Price Cap | ✓ No cap | Up to $800K (Sydney) | ✓ No cap |
| Requirements | Family member with property equity | First home buyer, must meet criteria | Serviceability + LMI approval |
Guarantor loans are one of the most popular ways to get into the market sooner. Here are some of the most common situations we help with:
The most common scenario. Parents use equity in their home to guarantee part of the loan, helping their child buy without waiting years to save a full deposit.
You earn enough to comfortably service a loan but haven't saved 20%. A guarantee bridges the deposit gap and avoids the cost of LMI.
Early career with strong income potential but limited savings history. A guarantee lets you enter the market now rather than waiting 3-5 more years.
Starting your investment journey? A family guarantee can help you purchase your first investment property without needing a full 20% deposit from savings.
Use our quick loan assessor to get an estimate of your borrowing power — including with a guarantor.
Try the Loan AssessorWe've helped hundreds of families structure guarantor loans that protect everyone involved. Here's how we do it:
We review both the borrower's income and debts AND the guarantor's property equity and financial position to ensure the structure works for everyone.
We limit the guarantee to the minimum amount needed — typically just the portion above 80% LVR. This minimises the guarantor's exposure and makes future release easier.
Not all lenders offer guarantor loans, and policies vary. We match you with a lender that offers favourable guarantor terms, competitive rates, and a clear path to releasing the guarantee.
We set a target for when the guarantee can be released — typically when the loan reaches 80% LVR through repayments or property value growth. Most guarantees are released within 2-5 years.
A well-structured guarantee only covers the 'gap' portion — typically the amount above 80% LVR. This means the guarantor's exposure is limited, not backing the entire loan.
Set a clear target to release the guarantee — usually when your equity reaches 20%. This gives the guarantor peace of mind and a defined exit point.
Lenders require guarantors to get independent legal (and sometimes financial) advice before signing. This protects the guarantor and ensures they understand their obligations.
A guarantee is not a loan to the parents. They don't make any repayments. They only become liable if the borrower defaults AND the sale of the property doesn't cover the debt — a rare scenario.