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Guarantor Home Loans

Compare mortgages from lenders who accept guarantors and learn how the home loan guarantor process works.


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Having a family member who owns property to act as your guarantor means you can get a mortgage more easily. You don't need to save 20% of the property's price and you can avoid a hefty lenders mortgage insurance premium. But there are risks you need to know about.

Compare home loans with guarantor options

The lenders in this table allow guarantors to cover at least a portion of your loan. Some of them may have specific restrictions or require a 5% deposit in genuine savings.

Data indicated here is updated regularly
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
P&N Bank & Home Loan Intro Rate
$0 p.a.
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
$0 p.a.
Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
$8 monthly ($96 p.a.)
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
Bankwest Complete Home Loan Package Variable - $200k to <$750k LVR ≤80% (Owner Occupier, P&I)
$395 p.a.
A low variable rate loan with a 100% offset account and package discounts.
P&N Bank Fixed Home Loan - 2 Year (LVR ≤ 80%, Owner Occupier)
$0 p.a.
Enjoy protection from changing interest rates with a 2 year fixed rate loan.
Bank of Melbourne Basic Home Loan - Special Offer (Owner Occupiers, P&I) LVR above 60% up to 80%
$0 p.a.
Up to $4,000 refinance cashback
A competitive variable rate loan from Bank of Melbourne. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).

Compare up to 4 providers

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Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

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How does a guarantor home loan work?

If you have a close family member with equity in their property (that means, they own all or most of the property) they can guarantee your deposit. You still need to borrow money from a lender and repay it, but the guarantor provides security.

And that's the catch: if you are unable to repay the mortgage your guarantor may have to.

To minimise risks a guarantor can guarantee only a portion of a loan, say, 20%. Once the borrower has repaid 20% of the loan the guarantor's property is safe even if the borrower fails to repay the remaining 80%.

Let's examine the process with a typical guarantor scenario:

Guarantor mortgage scenario

Sad couple sitting on a couch.

  • John and Rachel purchase a $600,000 apartment with a 5% deposit ($30,000).
  • They estimate their lenders mortgage insurance (LMI) premium using Genworth's calculator and are shocked to learn they'll need to pay $25,000.
  • Rachel's parents own their home outright. They agree to guarantee a further 15% ($90,000) of the property cost. This eliminates the LMI cost completely.
  • John and Rachel repay $150,000 of their loan over the next few years. Rachel's parents are no longer liable because the $90,000 they guaranteed has been repaid.

Who can act as a guarantor?

Some lenders only accept parents as guarantors while others accept close relatives. Every lender has different requirements, but the following criteria usually apply:

  • Finances and credit. A guarantor needs equity in their property, a stable income and a good credit rating to satisfy lenders.
  • Residency. Lenders generally want a guarantor to be an Australian citizen or permanent resident.
  • Age. A guarantor must be over 18 and typically under 65.

How much can I borrow with a guarantor?

With a guarantor, many lenders will let you borrow up to 100% of the value of a property or even up to 110%.

Even if you have a 5% deposit saved a guarantor can be beneficial. Having your parents guarantee a further 15% of the deposit means you can avoid paying LMI.

Note that some lenders require borrowers to have at least 5% of a deposit in genuine savings, even with a guarantor.

Risks and benefits of a guarantor mortgage

For the right borrower having a guarantor is a huge help. But if you cannot make a mortgage repayment your guarantor's property might ultimately become the bank's property.


  • Get into the property market faster. Once you're in the market and paying off your loan you can build up equity and enjoy capital gains if the property grows in value. If you spend more time saving up a 20% deposit without a guarantor the property might grow in value and you'd need to save even more.
  • Avoid LMI. Lenders mortgage insurance can add thousands of dollars to your home loan. A guarantor loan takes this cost out of the equation.
  • Improve your chance of getting approved. Having a guarantor will strengthen your home loan application.


  • Your property at risk. The guarantor risks their property if the borrower can't repay their loan. It's a serious risk and both borrower and guarantor need to understand it fully before entering a guarantor arrangement.
  • Relationship strain. Mixing family and financial relationships can cause serious emotional strain. You should evaluate not only your finances but your relationship beforehand.
Thankfully, a guarantor is only liable to repay the amount they guarantee. Once that amount is repaid the guarantor is released from further liability (the borrower, obviously, is not).

Planning to act as guarantor for your child? Ask these questions first

  • Can I afford to go guarantor? Assess your financial situation realistically. Plan out a scenario where you suddenly become liable for the full amount you've guaranteed.
  • Can the borrower afford this loan? Try to assess the borrower's financial situation as clearly as possible. Don't make this judgement on instinct either: ask for hard evidence.
  • How is your relationship with the borrower? Just because you're close family doesn't mean you get along at the best of times. And with large sums of money involved even good relationships can become strained.
  • Have I sought professional advice? Get independent legal advice to make sure you fully understand the guarantor process.

What are my options if I can't get a guarantor?

Having a parent who is able to guarantee your deposit is a privilege that many borrowers don't have. Your parents may be able to help in other ways or you may have to go it alone. Here are some options:

A mortgage broker can help you navigate your options as a borrower, whether you need a guarantor or not.

Find a mortgage broker

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Home Loan Offers

Important Information*
Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

Logo for St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).

Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

Logo for UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate

Take advantage of a low-fee mortgage with a special interest rate of just 2.49% p.a. and a 2.49% p.a. comparison rate.

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38 Responses

  1. Default Gravatar
    KeithApril 8, 2018

    We are selling an investment property which we have used as a guarantee for sons apartment which he is renting out while he works in Sydney.
    His present bank require him to refinance and seem unwilling to use our home as equity. He has negative equity in the apartment due to recent alterations.
    We want to transfer the guarantee onto our home which is paid for.
    We have no outstanding debts. His

    Are there any financial institutions that would accommodate this transfer.

    • Avatarfinder Customer Care
      MayApril 9, 2018Staff

      Hi Keith,

      Thanks for reaching out.

      Best if you can speak to a mortgage broker who can take into account your circumstances as well as your son’s. They know a wide range of lenders in the market who can give more options for your son’s.


  2. Default Gravatar
    RachaelApril 22, 2016

    We want to buy a house and looking into no deposit Lon with a guarantor but only my partner works $45k a year and I am on centrelink and we have two children. Would it be possible that any bank would lend to us we are looking at a house $160k

    • Avatarfinder Customer Care
      BelindaApril 26, 2016Staff

      Hi Rachael,

      Thanks for getting in touch.

      Your ability to qualify for a home loan will depend on several factors; your combined income, assets, liabilities, credit history, and the lender’s eligibility criteria for a particular product.

      Unfortunately, it can be difficult to qualify for a home loan if you’re receiving Centrelink benefits and if only one applicant is working as the lender may view you as a high-risk borrower. However, there are mortgage brokers who can help you find lenders, such as specialist or non-bank lenders, that are more likely to review your application.

      You can read more about no deposit home loans on this page, and you can also compare 95% loan-to-value (LVR) home loans. We also have an article about home loans for Centrelink recipients which may help you.

      When you apply for a no deposit or guarantor home loan, the application process can be more lengthy compared to a traditional home loan as the lender will need to assess the security and financial position of your guarantor. However, you can take measures to improve your chance of being approved. This may involve reducing your existing debts (e.g. credit cards) and making regular deposits into a high-interest savings account to show the lender that you have financial discipline.

      All the best,

  3. Default Gravatar
    JadeNovember 23, 2015

    Can I get a guarantor loan if the guarantor lives overseas and their equity is in the property they own overseas?

    • Avatarfinder Customer Care
      MarcNovember 24, 2015Staff

      Hi Jade,
      thanks for the question.

      Lenders generally require the guarantor to be Australian citizens, although some lenders will allow them to be working or living overseas. If the loan is being secured with the equity of a property (and not cash), the property is usually required to be in Australia.

      I hope this helps,

  4. Default Gravatar
    AbbyOctober 31, 2015

    My partner and I are planning on buying our first home. If we have a guarantor, are we still eligible for the first home owners grant?

    • Avatarfinder Customer Care
      MarcNovember 2, 2015Staff

      Hi Abby,
      thanks for the question.

      The use of a guarantor doesn’t usually exclude buyers from the First Home Owners Grant. Keep in mind that depending on the state there may be limits on the value of the property and whether the grant can be used for established or new properties.

      You can read more about the first home owners grant here.

      I hope this helps,

  5. Default Gravatar
    ThereseSeptember 29, 2015


    My partner & I would like to consolidate debt into a new mortgage, our equity just falls short to do this, are we able to use a partial guarantor for the shortfall? Our loan is 400k the property worth $475k debts of $57k

    • Avatarfinder Customer Care
      MarcSeptember 30, 2015Staff

      Hi Therese,
      thanks for the question.

      This will depend on the lender, but generally speaking a guarantor can guarantee any portion they’re comfortable with.

      I hope this helps,

  6. Default Gravatar
    deniseAugust 7, 2015

    if i want to borrow 100,000 as a secure personal loan, can my mother who is a pensioner and owns her home can we use her home as the security and what would be involved?

    • Avatarfinder Customer Care
      MarcAugust 7, 2015Staff

      Hi Denise,
      thanks for the question.

      Some personal loan providers will allow this, so it’s a good idea to compare secured personal loans and then contact the lender directly for more information. What’s involved in using property as security is that the guarantor will be required to guarantee a certain portion or the full amount of the loan. They then become responsible for the payment of the loan in the event that the primary borrower isn’t able to service the loan any longer.

      I hope this helps,

  7. Default Gravatar
    nellJune 28, 2015

    can someone sell there home if they have used some of it to be a guarantor

    • Default Gravatar
      JodieJune 30, 2015

      Hi Nell,

      Thank you for contacting, a financial comparison website.

      If your home is still being held as equity for the guarantor loan then you will need to have this released by the borrower you went guarantor for before you can sell your home. The borrower can release your property from the guarantee loan by paying out the portion of the loan that your home is held as equity for.

      We have a page on guarantor loans that includes information for those thinking of being, or who are, guarantor to a loan.

      It might also be best to speak to the borrower you have gone guarantor for as well as a financial advisor to see how you can proceed if you wish to sell your property.


  8. Default Gravatar
    StephenMay 20, 2015

    We already have an investment loan for a house, which we used a guarantor to mitigate paying LMI. My question is, can we use the same guarantor to buy a house to live in, again to mitigate LMI.

    • Avatarfinder Customer Care
      BelindaMay 25, 2015Staff

      Hi Stephen,

      Thanks for your enquiry.

      Depending on your lender, you may be able to use the same guarantor to help buy your property.

      It would be best that you contact a lender directly to discuss your options.


  9. Default Gravatar
    MumMay 1, 2015

    We went guarantor for our daughter and her husband for their home loan and now they are separating. If they sell the house they will be left with a $10,000 debt. She wants to sell and he doesn’t but there is no guarantee he will help contribute to the mortgage payments. Can we as guarantors make them sell the house?

    • Avatarfinder Customer Care
      BelindaMay 26, 2015Staff

      Hi Mum,

      Thanks for your enquiry.

      As a guarantor, you do not have rights to own or sell the property that was bought with the loan.

      However, it would be best to contact a mortgage broker and to seek financial advice to discuss your rights as a guarantor in this situation.


  10. Default Gravatar
    debApril 17, 2015

    if I was guarantor for a home loan for my son of say $500000 can I be guarantor for a specified amount of time like 2years

    • Avatarfinder Customer Care
      BelindaApril 17, 2015Staff

      Hi Deb,

      Thanks for your question.

      Depending on the lender, it may be possible to limit your guarantee for a limited amount of time.

      Generally, the guarantee will remain in place until you apply to have it removed. However, it is important to realise that if you were to cancel your guarantee soon after the loan settlement, the borrowers may be eligible to pay Lenders Mortgage Insurance (LMI).

      After a few years, however, it is likely that the principal repayments will have impacted the LVR and should you decide to cancel the guarantee, then LMI may not be payable.

      The policies of each lender will vary, so make sure you seek financial advice to find a home loan that suits both the borrower and the guarantor.

      I hope you find this useful.



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