Guarantor loans

Secure Your
Home Loan Sooner Than Later

Make homeownership easier with the support of a guarantor, helping you get approved sooner.

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Key Features

Boost Your Home Loan with a Guarantor

1. What Are Guarantor Loans?

A guarantor loan is backed by someone who agrees to cover repayments if needed.
2. Who Can Be Guarantor?

A trusted friend or family member with good credit can act as your guarantor.
3. Benefits of Guarantor Loans

These loans offer more suitable approval chances and potentially lower interest rates.
4. Is It Right for You?

Consider if you need financial support and have someone willing to guarantee.

Am I Loan-Ready?

Not sure if you meet the requirements for an investment loan? Use our real-time calculator to check your eligibility and learn how adding a guarantor could help get your application across the line.

GUARANTOR HOME LOANS

How Much Can You Borrow?

Discover your borrowing power with a guarantor loan—whether you’re buying, building, refinancing, or investing, find out how much you could unlock.

Borrow More as a Buyer

First-home buyers, investors, and builders can access up to 105% of the property value, helping you own your own home sooner than later.

Refinance or Consolidate with Ease

Refinance up to 100% or consolidate debts and purchase with up to 110% of your property’s value for greater financial flexibility.

TYPES OF GUARANTEES

Following guarantees can be used to get home ownership sooner

Security guarantee

Security and income guarantee

Family guarantee / parent guarantee

Limited guarantee

Why Choose US

Your Trusted Guarantor Loan Partners

At Everrich Finance, we specialise in guiding you through the process of securing guarantor loans that are tailored to your needs. Our experienced brokers make navigating the complexities of these loans simple, giving you the confidence to move forward and achieve your property goals.

Professional Advice

Our brokers provide clear, reliable guidance, helping you make well-informed decisions on your guarantor loan options.

Streamlined Process

From start to finish, we handle all the details, ensuring a transparent loan application and approval process.

Customized Solutions

We create loan strategies that are specifically designed to align with your personal and financial objectives.

Enhanced Flexibility

We help maximize the potential of your guarantor loan, offering solutions that adapt to your evolving needs.

We compare loans from a wide range of lenders

CORE ESSENTIALS

Guarantor Home Loans Simplified

What is a guarantor home loan?

A guarantor home loan is when a family member offers their own property as security to help the new home buyer purchase the property.

This allows the borrower to borrow between 100% and 110% of a property’s purchase price. Essentially, 80% is the secured the proposed purchase. The remaining balance of the loan not covered by the property value is the guarantee amount.

How much you can borrow using a guarantor loan depends on what type of borrower you are:

First-home buyers: 105% of the property value
Construction: 105% of the total land value and cost of construction
Refinancing: 100% of the property value
Debt consolidation and purchase: 110% of the property value.
Investors: 105% of the value of your investment property.

What are the benefits of a guarantor loan?

You can purchase a home now without a deposit.
You can avoid spending on mortgage insurance and mortgage insurance fees.
Discounted interest rates are available from some lenders.
You can consolidate personal loans, credit cards, car loans etc., when you buy your home.
You can limit the size of the guarantee to minimize your family member’s exposure.

What interest rates are available?

Competitive rates are available. Please contact us on (03) 9034 5223 or enquire online.

Lenders available:

Bank and non-bank lenders available. Please contact us on (03) 9034 5223 or enquire online.

Discover if you qualify:

We can help you buy or refinance property anywhere in Australia. Please contact us on (03) 9034 5223 or enquire online.

How do guarantor loans work?

Your guarantor will provide a guarantee for your home loan, which will be secured against their property. In most situation, this will be your parent or sibling assisting you in buying a home.

The idea is for you to get into the property market sooner. Once you have paid off part of your loan or your property value increase, then you can apply to have the guarantee removed.

Guarantor loans have become very popular in recent years. Because they cost less than standard home loans, they allow you to buy sooner because you don’t need a deposit and some lenders allows you to limit the size of the guarantee.

Secure your home with a guarantor loan

You can borrow up to 105% of the property value with the help of a family guarantor. Start your journey to homeownership today! Please contact us on (03) 9034 5223 or enquire online.

If you already own a property, we can look to release equity out of your existing property.

How is the mortgage for the guarantee structured?

The loan is secured by both the property that you are buying and the property owned by the guarantor.

If you use a limited guarantee, then the guarantor can reduce their guarantee to your mortgage by the value they provide guarantee for. If you can save at least 5% of the property value as a deposit, low-deposit home loan options are available. These options range from government schemes to gifted deposits and personal loans.

If your parents or siblings already have a home loan on their property. The guarantee for your loan is secured using a second mortgage behind their current loan.

How much is the limit of the guarantee

To limit the guarantor exposure we always request for the lender to limit the guarantee secured against the guarantor’s property. This means they are not liable for the entire loan amount, only a portion of the loan. The limited guarantee is calculated as follows:

Size of the limited guarantee = (Loan Amount – (0.8 * Purchase Price))/0.75.

For example, if you are buying a property for $1,000,000 and are borrowing $1,055,000 to cover your expenses such as stamp duty then the calculation would be:

($1,055,000 loan amount – (0.8 * $1,000,000 purchase price)) $255,000/0.75 = A limited guarantee of $340,000 (rounded to the nearest $100).

What types of guarantees are there?

Security guarantee: The guarantor uses their real estate as additional security for your loan. If the guarantor has an existing loan on their property, then we can take a second mortgage as security. This type of guarantee is most often used when first home buyers has an excellent credit history but have no deposit.
Security and income guarantee: A security and income guarantor is when a parent helping their son or daughter who is a student or who has a low income to buy their first property. The lender will use the parents’ property as security and will rely on the parents’ income to assist with servicing.
Family guarantee / parent guarantee: This is when the guarantor is directly related to the borrowers. Banks refer to this as a “parental guarantee”. Grandparents, siblings and other family members as guarantors are considered on a case-by-case basis.
Limited guarantee: A limited guarantee is where only part of the loan is secured by the guarantor. This is most often used with security guarantors to reduce the exposure secured on the guarantor’s property.

HOME LOAN WITH A GUARANTOR FAQs

FAQs about getting a home loan with a guarantor

1. Can I borrow more than 105%

Yes, you can. Most lenders allow you to borrow 105% of the purchase price, however we can lend up to 110% in some instances to help with debt consolidation.
2. Will Lenders Accept Guarantor Loans For Second Home Buyers? Do I need to prove I have any savings?

Even though guarantor loans allow you to borrow 100% of the purchase price, many lenders still require you to have 5% of the price in genuine savings. This means money you have saved yourself. Sometimes we can use history of paying rent in absence of genuine savings.

Some lender don’t have specific policy regarding genuine saving but their internal score card can auto decline the application due to the asset position.

Lenders view people who with high income and a low asset position as high risk. Many young people spend their money on their education, car, wedding or travelling and begin saving for a house later in their lives. These people are not high-risk borrowers, they just have different priorities!.
Talk to our team to discuss options available to you.
3. Can I buy an investment property with a guarantor loan?

Yes, you can. There are a few lenders in Australia who will accept a guarantor for an investment purposes.

We can generally help investors buy their first property via a guarantor loan. But more than 1 property is generally not allowed. This is because the guarantor the higher risk with no substantial benefit, and the borrower reaps the reward.
If the guarantor is in a strong financial position, we maybe able to seek an exception.
4. What if I cant make my repayments?

If you cannot make your home loan repayments, then lenders will try to recover their debt via sale of your property, before making the guarantor pay for the remaining debt outstanding.
The bank will only commence collection services when the loan is in arrears for 90-180 days.
5. How long does a guarantor stay on a mortgage?

A guarantor loan allows you to get in the market sooner. You can apply to remove guarantee when:
1. You can afford the repayments without any assistance.
2. Your loan is for less than 90% of the property value (ideally 80% or less to avoid lenders mortgage insurance).
3. You haven’t missed any payments in the last 6 months.

You must apply with the bank to remove the guarantee because it is not automatic.

Most people can remove the guarantee somewhere between 2 and 5 years after they set up the loan.

Most guarantees are set up when the borrower has no deposit, so removing the guarantee often depends on how much the property increases in value and how much the borrower has been able to make in additional repayments.
You can still remove the guarantee if you owe more than 80% of the property value, but you will have to pay lenders mortgage insurance which defeats the purpose of arranging the guarantor loan.
6. Should I get insurance?

You can get life insurance, total permanent disability insurance, trauma and income protection to provide the guarantor additional comfort in providing you the guarantee.

The lenders don’t make this a requirement to qualify for the loan, but in an unfortunate event you can use this money to pay down you debt.
We strongly recommend for you to seek advice from a financial adviser to ensure you choose an insurance product that suits your needs and financial situation.
7. What if my guarantor already has a home loan?

Even if your guarantor has an existing loan on their property we can still use a guarantor loan as long as they have sufficient equity in their property. We can arrange a guarantee via second mortgage so they don’t have to refinance their loan.

We need the guarantor to declare all loans secured against their property, including business or commercial property loans; otherwise approval may be withdrawn before settlement.

We recommend that you should not commit to any property until:
1. Consent for the second mortgage has been granted.
2. A bank valuation has been completed on your guarantor’s property.
3. Your lender has issued a formal approval.

If your parent’s property already has a loan against it there is a chance that the bank can deny a guarantor loan. We suggest all offers be made subject to finance and our team at Everrich Finance can help you navigate through the loan process.
8. What happens if a guarantor sells their house?

In the event that your parents or guarantor decide to sell their home to retire, downsize, change homes.
9. What options do you have?

Chances is that you wouldn’t have paid down your mortgage to less than 90% of the property value to allow you to waive your mortgage insurance fees that most lenders will require.

So before starting the discussion with our clients we will advise both applicant and guarantor that during the guarantee period it would restrict their ability to lend against their property and sell their property.

There are a few alternative options
1. If you owe more than 90% on your loan, and you have more funds to contribute to the loan and reduce loan balance to bring the loan to value ratio under 80%. This will mean that no mortgage insurance will apply.
2. We can reassess the property value and see if there are any increases in the property value. If the loan to value ratio is under 80% then you can remove the guarantee.
3. If your parents sell their property, you can use proceeds from sale to secure against a term deposit for the same dollar value that they guarantee. If the subsequently buy another property we can substitute the property against the term deposit provided as a guarantee.
4. You pay for the mortgage insurance when your parents or guarantor decides to sell.
10. Can we get a guarantor loan if my guarantor are already retired?

Most banks will not accept a security guarantee from a elderly or retired guarantor due to risk of bad publicity and credit requirement. However some banks can accept guarantees from people close to retirement, pensioners and self-funded retirees over 65 We just need to demonstrate their understanding and suggest legal advice is taken before signing the loan documents.
11. Can my parents provide a guarantee if their property is located in New Zealand?

In Australia the banks will not consider guarantor home loans if the property is located outside of Australia.

However, there are other ways you can get assistance from your parents
1. Gifted Deposit: Your parents can support you by providing a gift for the deposit. This can involve them taking out a loan against their property in New Zealand and then gifting it to you so that you can use that as a deposit towards your home.
2. Parent loan: Another option is when your parents lend you the money and you pay your parents back over time. This option is usually prepared by your solicitor.

Our team can review most suitable options for you and explore your home loan options to help your reach your goals.
12. Can I use siblings as a guarantor for my home loan?

Most guarantor loans are provided by parents. However, some lenders can accept immediate family members as guarantors. This can include siblings, grandparents, spouses, and de facto partners, provided they are over 18 years of age.

GUARANTOR HOME LOANS FAQ

FAQs about being a guarantor on a home loan

1. Who can be a guarantor?

Most banks will allow only a borrower’s parents to be guarantors.
Some lenders can consider guarantees from close family members such as siblings, grandparents, spouses, de facto partners or adult children.
2. Should I be a guarantor?

You should never feel pressured to be a guarantor on a loan.

Choosing to become a guarantor is a big decision. So we recommend that you seek independent legal and financial advice. You should ask yourself the following questions:
• How much is the guarantee that you are providing? If anything was to go wrong are you able to cover the limit of guarantee.
• What circumstances would you be liable to pay under your guarantee requirements? Generally, banks will on seek to recover debt from you if the loan applicant is more than 90 days in arrears. They will generally provide a series of reminder and then start legal recovery if the loan applicant does not respond after 180 days. In all instances the bank will try and recover their full debt against the applicants property and only seek to recover the difference from guarantor property if the debt is not fully paid.
• Who are you providing the guarantee for? Can you trust that they will be on top of their repayments. This may be difficult to answer if it’s your own son or daughter.

To protect guarantors, the Australian Banking Association has enforced a new Banking Code of Practice.
• Guarantors need to have at least 3 days to review their guarantee documents and consider their obligations before they can sign the loan documents.
• Guarantors are entitled to a cooling-off period after signing the loan agreement.
• Guarantors are recommended to seek independent legal advice before signing any agreement.
• If the borrower gets into financial difficulty, or their financial circumstances change, the bank will also need to notify the guarantor.
• The bank will attempt to retrieve assets from the borrower before starting action against the guarantor.
3. Is there any risks of being a guarantor?

Ultimately as a guarantor you run the risk of being liable for the debt if the borrower is unable to pay the loan.

Often there is a misconception, and people will fear that the banks will try to sell the guarantor’s home to recover their debt. However, the bank actually tries to avoid this because there is often substantial cost to sell the guarantor’s home.
The bank knows they will often struggle to recover the full debt and would much rather support their borrower to keep paying the mortgage. So they will try work out why the borrower is having trouble managing their repayments and whether they can make arrangement to help the client work through the problems.
4. What is a limited guarantee?

In the event that the loan applicant is unable to pay their loan, if you have a limited guarantee then you are liable pay for the guaranteed amount on the loan.

This is usually about 20-25% of the purchase price, plus stamp duty, conveyancing fees and other costs.

For example, assuming total loan is $1,050,000 there is total of $800,000 secured against applicants property and $250,000 secured against our guarantors property.

If the property sold for $1,050,000 or more and are able to cover for all sale cost then the guarantor wouldn’t have to worry about anything.

IIf the property sells for only $1,000,000, the guarantor will have to cover up to $50,000 with equity in their property to cover the shortfall.

If the property sold for $500,000 the maximum exposed guarantee is $250,000.
Guarantors should be aware of the size of the guarantee they’re providing.
5. What if I change my mind about being a guarantor?

If you are unsure about being a guarantor try and let the borrowers know immediately. If the borrower receives a home loan approval and secures the property any changes to the guaranteed position can adversely impact the loan approval. If the loan applicant needs to withdraw due to change of mind, the borrower can be sued by the vendor.

GUARANTOR HOME LOANS FAQ

General FAQs on Guarantor Home Loans

1. Why is there no Lenders Mortgage Insurance Premium?

If you borrow more than 80% of the valuation of the property the bank is likely to be exposed in the event of a default. So to protect the banks interest they will request for you to take out mortgage insurance. This fee can be quite expensive, costing the borrower more than $10,000.
However, with a guarantee as additional security, the bank use the guarantors property and the borrowers combined property value as security to eliminate this risk. As a result of this, they waive the requirement for lenders mortgage insurance.
2. Why is second mortgage a problem?

If the guarantor’s property is held with a different bank than the bank that the loan is proposed with we will need a second mortgage consent.

In most situation this is not a problem. But we would recommend that any offers made to purchase a property is made subject to finance until:
• The guarantors bank consents to the second mortgage.
• The valuation has been completed on your guarantor’s property.
• The lender has issued a formal approval.

Because there is a small risk that they will deny or withhold the consent, which can leave you in a difficult position.
3. Why won't my bank let me consolidate debt?

Only a few lenders will allow you to buy a home and consolidate your credit cards or personal loans at the same time. This can free up your repayment and reduce your cost of interest. Our team can guide you through this process.
4. What will happen if I get divorced?

In the event that you as the applicant were to split up and the partner chooses not to make any further repayment this can potentially put the property you purchase at risk.

In the event of a default this can also potentially put your parents in a difficult position. We can look at ways to protect all parties and seek legal advice before entering into a guarantee loan.

If you need assistance to buy out your ex-partner we can also help with this too.

If the property sold for $1,050,000 or more and are able to cover for all sale cost then the guarantor wouldn’t have to worry about anything.
IIf the property sells for only $1,000,000, the guarantor will have to cover up to $50,000 with equity in their property to cover the shortfall.
5. What banks offer guarantee loans?

Every lender seems to have come up with their own name for guarantor loans!
• ANZ: Family security guarantee
• Bank of Melbourne, BANK SA, St George: Family Pledge
• Westpac: Family Security Guarantee
• CBA: Home Loan Guarantor Support
• AMP First Home Buyer Family Guarantee
• Bankwest: Family Guarantee
• Heritage Bank: Family Guarantee
6. Can I get a low-doc guarantor loan?

There are really strict lending guideline for guarantor loans. So the bank will not offer a Low doc loans using the guarantor’s support.
As a work around if the guarantor gifts you the deposit or lends you the money this may work for you. This is not a preferred option for most lenders and we will need to assess whether this is suitable for you.
7. Why do I need an licenced professional advisor to be a guarantor?

It is a big decision to provide a guarantee for someone else’s loan. We always recommend the you seek advice from the appropriate professionals such as your solicitor and accountant before deciding to proceed.

By choosing to work with a professional mortgage broker like Everrich Finance our expert advisors can guide you through the process when applying for this type of loan like:
• Getting approval: Lenders are extremely cautious around providing guarantee loans and our team knows which lenders will be most willing to accept your situation.
• Know the terms and conditions: Most bank have simple guarantee loan process however, some have quite harsh conditions.
• The exit strategy: How do we remove the guarantee? With a loan term of 30 years we don’t want to keep the guarantors property secured for the entire loan term. Our expert advisor can help you work out a strategy of either making extra repayments, or refinancing to remove the guarantee in as little as 2 to 5 years.
• Protecting the guarantor: We can help you protect your guarantor and possibly yourself from possibly losing your home in an unfortunate event like death, injury, illness whereby you are not able to work for a long term. Our partners can reduce the risk to the guarantor by obtaining insurance.

Testimonials

Love from Clients

When I bought my first home, I had no idea about home loan. The team explained me every thing about home loan and offered me various choices compared to other brokers…

Sora Gwak

First Home Owner

Murray was absolutely wonderful to work with! He helped me with everything I needed to purchase my first home and was quick to respond to any calls and emails. Highly recommend Murray…

Melinda

First Home Owner

Murray and James are amazing operators. They are extremely knowledgeable on loan products for all scenarios and they have the hard work and dedication to match. The quality of service…

Gojko Boric

Property Investor

I had an amazing experience with these wonderful people. The entire process was seamless and they are very attentive and kept me in the loop. Everything was so quick that…

Cleo Kay

First Home Buyer

Purchasing my first property would not have been possible without the help of Murray at Everrich Finance. He was extremely thorough in every step of the application process and always…

Minh Vuong

First Home Buyer

I have been dealing with Murray on my home loan on a property that I purchased. Being the first home buyer and getting a home loan you all know isn't…

Hemal Sethia

First Home Owner

Find Out Your Eligibility Today

Unsure if you qualify? Let us assess your situation and explore the home loan options available to you for your guarantor home loan.

Guarantor loans

Secure Your Home Loan Sooner Than Later

185+

Key Features

Boost Your Home Loan with a Guarantor

1. What Are Guarantor Loans?

2. Who Can Be Guarantor?

3. Benefits of Guarantor Loans

4. Is It Right for You?

Am I Loan-Ready?

GUARANTOR HOME LOANS

How Much Can You Borrow?

Borrow More as a Buyer

Refinance or Consolidate with Ease

TYPES OF GUARANTEES

Following guarantees can be used to get home ownership sooner

Security guarantee

Security and income guarantee

Family guarantee / parent guarantee

Limited guarantee

Why Choose US

Your Trusted Guarantor Loan Partners

Professional Advice

Streamlined Process

Customized Solutions

Enhanced Flexibility

We compare loans from a wide range of lenders

CORE ESSENTIALS

Guarantor Home Loans Simplified

What is a guarantor home loan?

What are the benefits of a guarantor loan?

What interest rates are available?

Lenders available:

Discover if you qualify:

How do guarantor loans work?

Secure your home with a guarantor loan

How is the mortgage for the guarantee structured?

How much is the limit of the guarantee

What types of guarantees are there?

HOME LOAN WITH A GUARANTOR FAQs

FAQs about getting a home loan with a guarantor

1. Can I borrow more than 105%

2. Will Lenders Accept Guarantor Loans For Second Home Buyers? Do I need to prove I have any savings?

3. Can I buy an investment property with a guarantor loan?

4. What if I cant make my repayments?

5. How long does a guarantor stay on a mortgage?

6. Should I get insurance?

7. What if my guarantor already has a home loan?

8. What happens if a guarantor sells their house?

9. What options do you have?

10. Can we get a guarantor loan if my guarantor are already retired?

11. Can my parents provide a guarantee if their property is located in New Zealand?

12. Can I use siblings as a guarantor for my home loan?

GUARANTOR HOME LOANS FAQ

FAQs about being a guarantor on a home loan

1. Who can be a guarantor?

2. Should I be a guarantor?

3. Is there any risks of being a guarantor?

4. What is a limited guarantee?

5. What if I change my mind about being a guarantor?

GUARANTOR HOME LOANS FAQ

General FAQs on Guarantor Home Loans

1. Why is there no Lenders Mortgage Insurance Premium?

2. Why is second mortgage a problem?

3. Why won't my bank let me consolidate debt?

4. What will happen if I get divorced?

5. What banks offer guarantee loans?

6. Can I get a low-doc guarantor loan?

7. Why do I need an licenced professional advisor to be a guarantor?

Testimonials

Love from Clients

Sora Gwak

Melinda

Gojko Boric

Cleo Kay

Minh Vuong

Hemal Sethia

Find Out Your Eligibility Today

Secure Your
Home Loan Sooner Than Later