Guarantor mortgage scenario
Let's look at the process with an example guarantor scenario:
- Jai and Rahda purchase a $600,000 apartment with a 5% deposit ($30,000).
- They estimate their lenders mortgage insurance (LMI) premium using Finder's LMI calculator and are shocked to learn they'll need to pay $22,789.
- Rahda'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.
- Jai and Rahda repay $100,000 of their loan principal over the next 5 years. Rahda's parents are no longer liable because the $90,000 they guaranteed has been repaid.

Can I LOAN my son $300,000 to buy a home. And he pay me back $400 a week, without anyone being Taxed?
Hello Theresa,
thanks for the question.
As always it’s wise to contact the ATO directly regarding this matter, as they’ll have the final say regarding all matters of tax. Generally speaking, there may not be tax implications when loaning another person money, although if interest is charged, this should be declared as a taxable income.
I hope this helps,
Marc.