Guarantor Home Loans

Guarantor loans are a type of mortgage where a friend or family member will use the equity they have in their property as additional security or a safeguard against your loan.

Guarantor loans are very popular with first home buyers who are struggling to save a deposit or unable to get a loan by themselves, but they certainly aren’t limited to this group.

If you’re looking to buy a property and have a friend or family member who is willing to go guarantor, there are a number of reasons why you should choose this type of loan.

Pros — What’s good about a guarantor loan?

• No deposit required. If your guarantor has enough equity in their property, you won’t have to pay a deposit on your home. This means you can borrow 100% of the purchase price of your new home.
• Pay no mortgage insurance. With another property put up as security, the lender considers your loan low risk, and therefore will not require you to have mortgage insurance. This will save you thousands of dollars if you don’t have a deposit.
• You can remove the guarantee at a later date. Once you have enough equity in your home you can remove the guarantee, so your guarantor no longer has any responsibility for your property.

Cons — What’s bad about a guarantor loan?

• The person who goes guarantor is liable. You have to be doubly sure you won’t default on your loan, because if you do, the person who did you the favour of going guarantor will be liable for your debt.

Still have questions about guarantor home loans?

If you have any questions about guarantor home loans that aren’t covered above (in fact, even if they are!), please feel free to give us a call on 1300 883 292 or enquire below, and we’ll call you.