Get Into Your First Home Sooner With a Guarantor Loan
- Get better mortgage advice
Think You Can’t Buy Yet? Think Again.
If you’ve been told you need a 20% deposit to buy your first home, you’re not getting the full picture.
With the right guarantor home loan structure, you could:
- Buy your first home without a traditional deposit — using a guarantor to secure the loan
- Avoid paying thousands in Lenders Mortgage Insurance (LMI)
- Get into the market years earlier than by saving a full deposit
- Start building equity instead of paying rent
- In some cases, avoid LMI and qualify for standard rates available to low-LVR borrowers
At YMB, we have experts helping Australian families navigate guarantor mortgage options with clarity and confidence, daily. Both you and your potential guarantor will understand exactly how it works, the responsibilities involved, and when the guarantee can be released.
How Guarantor Home Loans Work
A guarantor home loan allows a family member (typically parents) to use the equity in their property to guarantee part of your loan, usually covering what would have been your 20% deposit.
Here’s why they’re powerful:
- You can buy with $0 deposit – just cover the non-government fees
- You avoid Lenders Mortgage Insurance (LMI), saving thousands
- You can enter the market sooner rather than years of saving
- Your guarantor doesn’t need to give you cash—just the security of their property equity
- The guarantee can be removed once you’ve built enough equity (typically 2-5 years)
Important: Guarantor loans involve responsibility for both borrower and guarantor. We take the time to ensure everyone fully understands the commitment.
Who Can Act as Your Guarantor?
Specialised lenders accept the following as guarantors:
- Parents or step-parents (most common)
- Siblings in some circumstances
- Grandparents with some lenders
- Other immediate family members (varies by lender)
Your guarantor will need:
- To own property with sufficient equity
- A stable financial position
- The ability to meet their own financial commitments
- To understand their responsibilities and risks
We’ll help both you and your potential guarantor assess whether this arrangement makes sense for your specific situation.
Why Australian Families Trust YMB for Guarantor Home Loans
Family-Focused Approach
We ensure both you and your guarantor clearly understand the arrangement
Lender Expertise
We know which lenders offer strong policy support for guarantor loans and competitive terms
Exit Strategy Planning
We help plan when and how the guarantee can be released
Transparent Communication
No jargon, no pressure—just clear explanations everyone can understand
Ongoing Support
We’re here to answer questions even after your loan settles
Our Simple 5-Step Guarantor Loan Process
1. Initial Consultation
We assess whether a guarantor loan suits your situation and explain how it works.
2. Guarantor Discussion
We arrange a meeting with you and your potential guarantor to explain their role.
3. Loan Strategy
We identify the most suitable guarantor mortgage lenders and loan structure.
4. Application & Approval
We handle the paperwork for both you and your guarantor, making it as simple as possible.
5. Settlement & Beyond
We manage the settlement process and provide a clear plan for removing the guarantee.
Client Testimonial / Social Proof
“We thought we couldn’t buy yet — but we could.”
“They made it simple and stress-free.”
“I finally felt like someone was in my corner.
“They made it simple and stress-free.”
How YMB Finance Helped Sarah Buy Her Dream Home
Sarah, 36, thought she was still years away from buying. She was saving hard but didn’t have the 20% deposit lenders usually require.
When she found a property at great value, she didn’t want to miss out. With our help, she asked her sister and brother-in-law to become guarantors, using the equity in their own home.
We sat down together, explained what being a guarantor meant, and showed how their risk would be managed. Confident in the process, they agreed.
Sarah secured the property, and within three years the guarantors were released as the home’s value grew. She entered the market much sooner than planned, with her family’s support only needed for a short time.
Guarantor Home Loan Questions, Answered
Most commonly, parents or step-parents act as guarantors, but some lenders accept siblings, grandparents, or other close relatives. The guarantor needs to own property with sufficient equity and have a stable financial position. Each lender has different policies on who they’ll accept as a guarantor.
With a guarantor, you can potentially purchase a property with as little as 0% of the purchase price saved as a genuine deposit. Some lenders may require more depending on your circumstances and the property you’re buying. We’ll help you understand exactly what’s needed for your situation.
If you miss repayments, the lender will first work with you to get back on track. Only in cases where you default on your loan and the bank can’t recoup their costs, they would turn to your guarantor. This is why we ensure both borrowers and guarantors understand their responsibilities and have contingency plans in place.
No, your guarantor doesn’t need to own their property outright, but they need to have sufficient equity. Typically, lenders will want the combined loan-to-value ratio (including your loan and their existing mortgage) to be under 80% of their property value.
A guarantee can typically be removed once you’ve built enough equity in your property so that your loan-to-value ratio is below 80%. This usually happens through a combination of your regular repayments and natural property value growth, typically taking 2-5 years.
No, guarantor loans generally have the same interest rates as standard home loans. In fact, because you’re avoiding Lenders Mortgage Insurance (LMI), a guarantor loan can save you thousands compared to a low-deposit loan without a guarantor.
If your guarantor wants to sell their property, you’ll generally need to either have the guarantee released (if you’ve built enough equity) or provide a security exchange. We can help navigate this situation if it arises.
Yes, some lenders allow guarantor loans for investment properties. However, policies are often stricter than for owner-occupied purchases. We can help identify which lenders offer this option.
Your First Home Could Be Within Reach
A guarantor home loan could be your pathway to property ownership sooner than you think. Let’s explore whether it’s the right option for your situation.
The information on this website is general in nature and does not constitute personal financial, legal, or tax advice. Please consult a licensed financial adviser, tax professional, or legal adviser before making any financial decisions.
YMB provides credit assistance and lending structuring services only. We do not provide personal financial advice or tax advice.