How a Family Guarantee Could Help You Buy a Home Sooner
Could a Family Guarantee Help You Buy Property Sooner?
If you’ve been dreaming of getting into the property market but feel like your deposit just isn’t keeping up with rising prices, you’re not alone.
One option that could help is a Family Guarantee loan — and it’s not just for first-home buyers.
This strategy allows a close family member (usually a parent) to use the equity in their own property to help secure your loan. It’s a powerful way to boost your borrowing power and step into the market sooner.
🏡 What is a Family Guarantee?
Also known as a guarantor loan, a Family Guarantee lets you borrow up to 100% of a property’s purchase price — often without needing Lenders Mortgage Insurance (LMI).
Instead of needing a full deposit, your guarantor’s property provides additional security for the lender.
This means that even if your savings are low, but your income is stable, you may still be able to buy a home — sometimes faster than trying to save a 20% deposit as the market keeps rising.
✨ The Pros of a Family Guarantee
✅ Avoid or reduce Lenders Mortgage Insurance (LMI) — saving you thousands
✅ Buy with a smaller deposit (or none at all)
✅ Get into the market faster, even as prices continue to rise
✅ Boost your borrowing capacity when income is solid but savings are limited
✅ Potential access to better interest rates due to a lower loan-to-value ratio (LVR)
✅ It’s a way for parents to support adult children without needing to gift cash — they can stay in their home and help at the same time
And remember — Family Guarantee loans aren’t just for first-time buyers. In some cases, they can also be used by next-home buyers depending on the lender and circumstances.
⚠️ What to Watch Out For
It’s a great option in the right scenario, but it’s not without risk. Make sure you and your guarantor both understand the responsibilities:
➖ If you default and there isn’t enough equity in your home, the guarantor is liable for the shortfall
➖ Their property is used as security for the loan
➖ It may reduce their future borrowing options
➖ You’ll still need to show you can service the loan on your own
That’s why it’s so important to get proper guidance and structure the loan carefully.
🏦 Which Lenders Offer Family Guarantee Loans?
Some of the banks currently offering these types of loans include:
CBA
ING
Bankwest
Beyond Bank
ANZ
AMP
Wave Money
St George
Westpac
Every lender has slightly different rules, so it really does pay to get personalised advice.
💬 Is It the Right Option for You?
Ask yourself:
Can you save faster than the property market is rising?
If not — and you’re lucky enough to have a supportive family member with equity to help — a Family Guarantee loan might be the right solution.
One of the most powerful aspects of this strategy is that your parents can help without giving you cash or needing to move. Their property is used as additional security — they remain in their home the entire time, and no money changes hands.
Over time, as you build up equity in your own property, the guarantee can be released — and their home is no longer tied to your loan.
It’s a great way to get a jump-start, without putting anyone under unnecessary pressure.
📲 Thinking about using a Family Guarantee to buy property?