Saving a deposit is tough, especially when rent keeps rising and house prices aren’t slowing down. But if you’ve got a supportive parent, grandparent or sibling willing to help, a family guarantor loan could fast-track your home ownership journey.
We make sense of the process and help you explore if this option is the right fit, without the confusing jargon or pressure. Just honest, expert advice tailored to your goals.
What is a family guarantor loan?
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A guarantor home loan allows a close family member to use part of the equity in their own home as extra security for your mortgage. This doesn’t mean they’re handing over cash, no money changes hands.
But it does mean you may be able to:
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Buy your home sooner
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Borrow with a smaller (or no) deposit
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Avoid paying lenders mortgage insurance (LMI), which can save thousands
Who can be a guarantor?
Most lenders prefer immediate family such as parents, grandparents, or siblings. Some may accept extended family or even ex-partners. It depends on the lender, which is where our experience (and Locale Financial) comes in.
We’ll help you compare your options, understand the responsibilities, and set things up in a way that protects both you and your guarantor.
How does it work?
Let’s say you want to buy a $750,000 home. You’ve saved $75,000 a 10% deposit. Most lenders would ask you to pay LMI (Lenders Mortgage Insurance) unless you have a 20% deposit. But with a guarantor providing security for the remaining $75,000, you could:
Skip the LMI
Secure the full 20% deposit
Get into your new home faster
Your guarantor doesn’t make any loan repayments. You’re still fully responsible for your mortgage, but if you can’t meet your repayments, the lender may call on the guarantor to step in. That’s why clear communication and the right support are essential for everyone involved.
See if you qualify
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​I cannot recommend Audris at Locale Homes highly enough! From our very first meeting, she was incredibly friendly and approachable, making what could have been a stressful process feel exciting and manageable.
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Thanks to Kristen and the team for finding me the perfect block of land and organising everything from working with developers and builders to finding the perfect house plan. The whole process has been fantastic, they always answer every question, keep me in the loop with updates and I would be so lost without all their work. Highly recommend Locale Homes.
