A guarantor loan in Australia: Everything you need to know
A guarantor home loan can be the best way for you to buy a home if you don't have a lot of money to spend. If your finances aren't strong enough on their own, this form of loan lets a family member or friend act as a guarantor, which helps you get a house loan.
In Australia, first-time homebuyers are increasingly using guarantor home loans to get into the property market. Our expert mortgage brokers help you understand guarantor loans, find the right lender, and structure the perfect loan with a guarantor to make homeownership achievable.
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Free Guarantor Loan AssessmentWhy choose Buyvest mortgage brokers for your guarantor home loan
35+ lenders to compare
Banks represent only themselves. We represent you, comparing rates and terms across all major lenders who offer guarantor loans.
No cost to you
Lenders pay our commission directly. You pay the same rate whether you go to the bank directly or through us—but with expert guidance included.
Time & money savings
We navigate complex paperwork, coordinate with guarantors, and manage lender communications. We often save clients thousands in rates and fees.
Specialised strategies
We structure your guarantor loan to match your situation. We guide both you and your guarantor through the process and protect everyone's interests.
First-time buyer expertise
We specialise in helping first-time homebuyers enter the market. We understand your challenges and know how to maximize your chances of approval.
Ongoing support
We don't disappear after settlement. We're available for rate reviews, refinancing, and future home upgrades as your circumstances change.
How can Buyvest mortgage brokers help you with your guarantor home loan?
Lower deposit requirements
One of the best things about a guarantor home loan is that it lowers the amount of money you need to put down. You might not need to save 20%—perhaps just a small amount or none at all.
Easier loan approval
If you don't satisfy the usual requirements for a loan, a guarantor home loan can help you acquire one. Lenders are more likely to approve loans with a guarantor backing them.
No lender's mortgage insurance (LMI)
You won't have to pay for LMI with a guarantor home loan, saving you thousands of dollars. Normally borrowers with deposits under 20% pay LMI—but not with a guarantor.
Access better rates
With a guarantor backing your loan, you qualify for better interest rates. The guarantor's financial position strengthens your application significantly.
Faster settlement
Our guarantor loan expertise means smoother, faster approvals. We coordinate with your guarantor and lender to keep everything moving quickly.
Guarantor guidance
We explain the guarantor's obligations clearly and help protect both parties' interests. We ensure everyone understands their responsibilities before signing.
What is a guarantor loan?
A guarantor loan lets someone who is in better financial shape back up your house loan. If you don't pay back the loan, this individual, called a guarantor, undertakes to take care of it. People with not enough for a down payment sometimes use the guarantor loan to help them buy a home.
How guarantor security works
In Australia, guarantor home loans let the guarantor put up collateral for the loan. The loan is backed by the guarantor's home or other property. This extra security makes the lender feel better, which makes them more likely to approve your loan.
Who can be your guarantor?
Most of the time, a family member, such as a parent, has to be the guarantor for a loan. Siblings or ex-partners can sometimes be a guarantor if they have a property and are prepared to take on the obligation. The guarantor needs to be financially solid with enough property to cover the loan if needed.
Guarantor home loan calculators
Use our free mortgage tools to calculate your borrowing capacity and understand your guarantor loan options
Advantages of guarantor home loans in Australia
Less money needed for a deposit
One of the best things about a guarantor house loan is that it lowers the amount of money you need to put down to get a home loan. You might not need to save up as much as 20% for a down payment. You might simply need a little or none at all.
Easier to get approved
If you don't satisfy the usual requirements for a loan, a guarantor home loan can help you acquire one. If a loan has a guarantee, lenders are more likely to approve it.
No lender's mortgage insurance (LMI)
You won't have to pay for LMI with a guarantor home loan, which can save you thousands of dollars. If a borrower's deposit is less than 20%, they normally have to pay LMI. However, the guarantor's security can assist you in avoiding this fee.
Get into the market sooner
Instead of waiting years to save a 20% deposit, a guarantor loan lets you buy now and build equity in your own home immediately. This can be a smart financial move in a growing property market.
Things to consider before choosing a guarantor home loan
Guarantor's financial responsibility
If you don't pay back the loan, your guarantor will be accountable for it. The guarantor must know all the dangers and duties that come with the job. Before accepting help, they should think hard about their money condition and be comfortable with the risk.
Impact on relationships
This could make things between you and the guarantor worse if you have financial difficulties. It's important to discuss this carefully before proceeding and have clear communication about expectations and risks.
Guarantor's financial commitments
The guarantor's property is used as security, which could affect their ability to borrow for other purposes or refinance their own home. Make sure they understand this limitation.
Release terms and conditions
Some lenders who offer guaranteed home loans let the guarantor off the hook when you have a certain amount of equity in the property. Understand these release conditions upfront.
How to apply for a guarantor home loan in Australia
Meet with us to discuss your situation and confirm your guarantor is willing to help. We assess both your finances and theirs.
Collect financial information from both yourself and your guarantor, including income, assets, debts, and property details.
We submit your application to lenders. They assess both your finances and those of your guarantor before approving the loan.
Once approved, your guarantor signs the guarantee document, and your loan settles. You can then purchase your property.
Documents needed for a guarantor home loan application
Have these ready to streamline your approval process and get pre-approved faster for your guarantor home loan.
Personal Identification (Both Parties)
Australian passport or driver's license (with photo, full name, DOB, current address), plus citizenship certificate or birth certificate for both borrower and guarantor.
Proof of Income (Both Parties)
Two recent payslips from current employer, or 2 years' tax returns if self-employed. For contract/casual work, employment letters plus most recent Pay As You Go (PAYG) summary for both parties.
Financial Statements (Both Parties)
Latest bank statements (3 months), savings account statements, and internet banking history showing current financial position for both borrower and guarantor.
Existing Debt Information (Both Parties)
Statements for all existing home loans, car loans, credit cards, and personal loans for both parties. We calculate full debt servicing capacity.
Guarantor's Property Documents
Council rates notice, property valuation, and building insurance documents for the guarantor's property being used as security.
ABN & Business Documents (If Self-Employed)
ABN details, 2 year's company tax returns & profit & loss statement, personal tax return, personal notice of assessment & Business Activity Statements.
Get into the property market with a guarantor home loan
Australians can enter into the housing market without having to put down a lot of money by getting a guarantor loan. If you have a guarantor home loan, you are much more likely to get approved for a loan and save money on LMI.
But it's important to know what you and your guarantor are responsible for and what dangers you both face. If you're thinking about getting a guarantor loan, you should look at all of your alternatives and talk to a financial expert to figure out the best way to move forward on your route to homeownership.
Frequently asked questions about guarantor home loans
What is a guarantor home loan?
A guarantor home loan is a loan where someone, usually a family member, acts as a guarantor, using their property or assets as security for the loan. This allows borrowers to purchase a home with a smaller deposit.
Can a friend be a guarantor for a home loan in Australia?
No, a close friend can't be a guarantor for your loan, as this will not meet the lender's requirements. Lenders typically require guarantors to be family members with demonstrated financial stability.
How much deposit do I need for a guarantor home loan?
With a guarantor home loan, you may not need a deposit or can pay a smaller amount compared to a standard home loan. Some lenders accept zero deposit with a strong guarantor.
Are there risks to a guarantor loan in Australia?
Yes, the guarantor is financially responsible if you fail to make your loan payments, which can cause strain on relationships. The guarantor's property is also pledged as security, affecting their borrowing capacity.
How can I apply for a guarantor home loan?
To apply for a guarantor home loan, you'll need to provide financial details for both yourself and your guarantor. The lender will assess both parties' financial stability before approval.
Mortgage brokers for guarantor home loans across Sydney and Australia
Our expert mortgage brokers help first-time homebuyers access guarantor home loans across Sydney and Australia. Whether you need help understanding your guarantor loan options or finding the right lender, our team of experienced guarantor loan specialists are here to guide you toward homeownership.
Ryde area suburbs
Greater Sydney regions
Regional NSW
Australia wide
Ready to get into the property market? Contact us to explore guarantor home loan solutions nationwide and how we can help you achieve homeownership.
Make your first home a reality
Get expert advice on guarantor home loans tailored to your situation. Our mortgage brokers have helped thousands of first-time homebuyers enter the property market with confidence.
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Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
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