Guarantor Home Loans: Buy a Home Sooner with Family Support

At Sunshine Coast Mortgage Brokers, we help you secure Guarantor home loans that allow you to borrow up to 100%, with the help of a guarantor, avoiding LMI. If you’re searching for a Mortgage Broker near me, our local team can guide you through this process.

If saving for a 20% deposit feels like an impossible task, a guarantor home loan could be the answer. With a family member acting as a guarantor, you can buy a home with a low deposit, or even no deposit, without needing to pay Lenders Mortgage Insurance (LMI).

Why Choose Sunshine Coast Mortgage Brokers for Your Guarantor Home Loan?

A guarantor home loan allows a family member which is usually a parent to use the equity in their property as security for your loan. This means you can borrow up to 100% of the property’s value plus any fees without paying LMI, even if you haven’t saved the typical 20% deposit.

Benefits of Guarantor Home Loans in Australia

Guarantor loans are very popular choice for first-time buyers who are struggling to save a 20% deposit. Here are some key benefits:

  • Buy Sooner with a Smaller Deposit: You can buy a home with no deposit if you have a family member who is happy to help with Guarantor Support. As a result, you can also put some of your own savings towards the purchase as well.
  • No LMI Costs: By using your guarantor’s equity, you avoid paying LMI, which could save you thousands.
  • Borrow Up to 100%: In some cases, you can borrow up to 100% of the property’s value plus purchasing costs, as a result you won’t need to delay your purchase.

How Do Guarantor Home Loans Work?

Here’s how guarantor loans typically work:

  1. Guarantor Provides Equity: A family member (usually a parent or sibling) offers part of their home’s equity as additional security for your loan.
  2. Borrow with a Low Deposit: You can borrow more—up to 100%—without having to save a 20% deposit. 
  3. Avoid LMI: With the guarantor’s security in place, you won’t need to pay LMI, which usually applies when your deposit is less than 20%.
  4. Release the Guarantor: Once you’ve paid off a portion of the loan or built enough equity, the guarantor can be released.

Who Is Eligible for a Guarantor Home Loan?

Most lenders allow immediate family members (parents, siblings, or grandparents) to act as guarantors. To qualify, both you and your guarantor need to meet certain conditions:

  • Stable Income: You need to show you can afford the loan repayments.
  • Guarantor’s Equity: Your guarantor must have sufficient equity in their home to cover the security needed and have enough buffer to keep the Guarantor in a safe financial position.
  • Guarantor’s Financial Stability: Lenders will check your guarantor’s financial situation to ensure they can cover the risk but also Guarantor home loans are usually a ‘limited guarantor’. This means they are only helping with a limited portion of the equity.

Find a Trusted Mortgage Broker Near You for Guarantor Loans

Applying for a guarantor loan involves a few key steps, as your local mortgage broker in sunshine coast I’m here to guide you through the process:

  1. Assess Your Deposit: Determine how much deposit you have saved and how much support you need from your guarantor.
  2. Choose a Lender: I’ll help you compare guarantor loan offers from various lenders to find the best deal and make sure your family member that is helping is in a safe financial position.
  3. Submit the Application: With the help of your guarantor, we’ll submit the necessary paperwork, including proof of income and your guarantor’s equity and financial position.
  4. Approval and Settlement: Once approved, you’re ready to settle the loan and move into your new first home.

Client Testimonials

First-time home buyers wanted to make cosmetic renovations to their new property but didn’t have enough savings for both a deposit and the renovations. They turned to Sunshine Coast Mortgage Brokers, who secured a guarantor support loan, allowing them to purchase the home with no deposit. This meant they could use their savings for the renovations, which increased the property’s value within two years. They were then able to refinance and release their parents from the guarantor loan. This Guarantor Home Loan saved them $32,500 in LMI.
- Alex & Jess
First-time home buyers used his savings to pay off his HECS debt but had no funds left for a home deposit. He approached Sunshine Coast Mortgage Brokers, who helped him secure a guarantor support loan, allowing him to purchase his first home with no deposit. This saved him $17,600 in LMI, which he would have paid if he had used his savings for the deposit instead of paying off his HECS.
- Brendon

A guarantor home loan allows a family member to use their home’s equity as security for your loan, enabling you to borrow more with a lower deposit and avoid LMI.

With a guarantor, you may not need a deposit but can use as little as 5% deposit, depending on the lender’s requirements.

Most lenders will require you to show Genuine Savings which can be show with a rental ledger.

Yes, guarantor loans allow you to avoid LMI even if your deposit is less than 20%, which can save you thousands.

Immediate family members—like parents, siblings, or grandparents—can act as guarantors if they have enough equity in their property and a satisfactory financial position.

Once you’ve built enough equity in your home (usually 20% of the property’s value), your guarantor can be released from the loan, and their property will no longer be at risk.

Yes, if you default on your loan and can’t repay, your guarantor may be responsible for covering the portion of the loan they secured with their equity. It’s important for guarantors to fully understand the risks before proceeding.

It is important for your guarantor to get legal advice.

Unlock Homeownership with a Guarantor Loan

A guarantor home loan can make homeownership a reality, even if you haven’t saved the typical 20% deposit. With family support, you can buy your first home sooner, avoid LMI, and start building equity right away.

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