Buy your first home sooner using a family member’s equity
If saving a full deposit is holding you back, a family guarantor home loan may let you buy with little or no cash deposit, while avoiding lenders mortgage insurance in many cases.
A guarantor loan can solve the deposit problem without waiting years
Instead of waiting until you have saved 20%, a close family member may be able to use part of the equity in their property as extra security for your loan. You still make the repayments. The guarantor does not usually hand over cash.
How a family guarantor loan works
The goal is simple: help you get into the property sooner, while keeping the guarantee as limited and temporary as possible.
1. Your family member offers security
A parent or close family member may use part of their property equity as additional security for your home loan.
2. You borrow for the purchase
You are still the borrower. Your income, expenses, credit history and property choice need to work for the lender.
3. The guarantee can be released later
Once your equity improves, the goal is to remove the guarantee so your family member is no longer tied to the loan.
This may suit you if…
You have income but not enough deposit
- You can afford repayments
- You have stable employment or business income
- You are struggling to save a large deposit while prices move
Your family wants to help safely
- They own property with usable equity
- They understand the risks
- They want a clear exit plan, not an open-ended commitment
Watch the family guarantor loan explainer
Once you understand the basics, this video gives you a fuller explanation of how a guarantor home loan works, when it can help, and what risks your family should understand before using their property as support.
Not sure if a guarantor loan is the right move?
We can compare this against the 5% Deposit Scheme, Help to Buy, and normal low-deposit lending so you do not choose the wrong pathway.
Book a First Home Buyer Discovery Call
Choose a time below and we can work out whether a family guarantor loan, Help to Buy, the 5% Deposit Scheme, or another pathway is the best fit for your situation.
What we check before recommending it
Your borrowing power
Can the loan fit your income, expenses and future plans without creating unnecessary stress?
Your family member’s position
Does the guarantee expose them to risk they do not understand, or is there a clean structure available?
Your exit plan
How and when could the guarantee be removed once the property value rises or the loan balance reduces?
Family guarantor loan FAQs
Does my family member have to give me money?
Usually no. The common structure is using a portion of their property equity as security, rather than transferring cash to you.
Can this help me avoid lenders mortgage insurance?
In many cases, yes. The extra security may reduce the lender’s risk enough to avoid LMI, but it depends on the lender and structure.
Is my family member responsible for the whole loan?
The aim is usually to limit the guarantee to a specific portion of the loan, but the risk must be explained carefully before anyone signs.
When can the guarantee be removed?
It may be removed once you have enough equity and the lender is satisfied. This can happen through repayments, property growth, or refinancing.
Want to know if this gets you into a home sooner?
Send through your situation and we will help you work out whether a guarantor loan, Help to Buy, or another first home buyer option is the better fit.
General information only. Lending criteria, eligibility and risks vary by lender and personal circumstances.