Enlighten Financial Solutions - Mortgage Brokers Australia Finance options

Guarantor Loans are Very Popular

Saving for a house deposit can be a daunting task and if you’re paying rent while you are trying to save, it can really feel like an uphill battle.

While you are trying to save as diligently as you can, house prices may start to go up again and you may already be feeling uneasy about interest rates. More time lost trying to save your deposit may see you miss out on potential capital growth and property purchases in your price bracket.

However, there may be an option! If you have a parent with equity in their property, then a guarantor loan could be the solution that can get you into the market sooner and save you a lot of money.

Guarantor loans allow you to borrow your deposit and purchase costs against the value of a parents property.

Here is a brief overview of loan structure & requirements (based around total loan amount that is demonstrated in serviceability):

  • 80% of the loan amount required to purchase the home is secured by your new property
  • The remaining amount of loan funds required to purchase the home  plus purchase costs, minus your contribution (deposit), is secured by the guarantors property and yours
  • If serviceability is evident, you can in theory borrow 100% of the purchase price, including purchase costs which wipes away the need for genuine savings demonstration.
  • The guarantor can’t be retired & or on the pension
  • If there is a mortgage over the guarantors property, the total LVR with have a limitation on it, depending on the lender.


An important thing to highlight is, because of this particular loan structure, you don’t have to pay expensive Lenders Mortgage Insurance (LMI). This is one of the main reasons people choose to apply for this type of home loan.

You may have some questions about how this loan structure can work for you. We are very experienced with this type of loan structure. If a guarantor loan sounds like it could be the right fit for you, book an appointment today.



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