ACL 390611 | MFAA Member | Established 2005
Guarantor Home Loans.Buy Sooner Without the Deposit.
A guarantor home loan lets a parent use equity in their property to cover the deposit you have not saved, which can remove lenders mortgage insurance entirely. It also puts their home behind your loan. Both of those are true, and the second one is the reason this needs doing carefully.
15 minutes, and bring your parents if they are considering it. No credit check, no paperwork, no obligation. We will tell you what they would actually be signing, and if paying lenders mortgage insurance is the safer answer for your family, we will say that. Lenders pay us a commission on settlement and we disclose it in writing before any work begins.
Intellect Finance – Guarantor Loan Specialists
Independent since 2005 | ACL 390611What Is a Guarantor Home Loan?
A guarantor home loan is a loan where someone else, usually a parent, offers equity in their own property as additional security so the borrower can buy with a smaller deposit. Because the lender holds more security, lenders mortgage insurance can often be avoided entirely.
The guarantor does not lend money and does not go on the title. They give the lender a legal promise, backed by their property, that the debt will be paid. ASIC’s description is direct: a guarantor agrees to repay the loan if the borrower cannot, and may have to repay the whole loan plus interest.
Most guarantees on family loans are limited, meaning the guarantee is capped at a set amount rather than the full loan. That is the structure worth insisting on. It is also worth planning the release at the start, because a guarantee does not end on its own and getting out of one after the fact is difficult.
Common Situations
When a Guarantor Home Loan Comes Up
Six situations account for most guarantor enquiries. In two of them there is a better answer than a guarantee, and we will tell you which two you are in.
Good income but no deposit
The classic case. You can comfortably service a loan but the deposit is years away at current prices. A guarantee bridges the gap that saving cannot, and the servicing strength is what makes it defensible.
You have a deposit but not twenty per cent
Here the guarantee competes with lenders mortgage insurance rather than replacing nothing. Sometimes paying the premium is the better family decision. That comparison is further down this page.
Your parents want to help without giving cash
A guarantee uses equity rather than savings, so no money changes hands and their own loan usually continues as it is. Their equity position and their remaining borrowing capacity both get checked first.
Buying with a partner where only one side has support
Workable, and it changes how the guarantee is sized and whose interests need separate advice. See joint loans for how two applicants are assessed together.
A guarantor is already in place and wants out
Release is a process rather than a date. It generally needs a fresh valuation, enough equity in your own property to stand alone, and the lender’s agreement. Often a refinance is the cleanest route.
The guarantor is retired or close to it
Lenders look harder at guarantees from people no longer earning, because the ability to cover a default is part of the assessment. It is not automatically a no. It is a case for getting the structure and the advice right first.
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Joseph Sukkar
Principal Broker · ACL 390611
Who You’re Dealing With
Built on 25 Years in Australian Finance
Joseph Sukkar started in finance in 2000 and founded Intellect Finance in Penrith in 2005. Since then the team has arranged more than 6,500 loans for clients across Australia, from first homes to complex commercial and asset finance.
Residential lending sits with Moufid, our Head of Residential Lending, who has sat at a lot of kitchen tables explaining what a guarantee actually is. On a guarantor file the useful work happens before anything goes to a lender: sizing the guarantee to the deposit gap rather than the whole loan, agreeing what the release will require, and making sure the guarantor takes the structure to their own solicitor. Sometimes the honest answer is that paying lenders mortgage insurance is the safer choice for the family, and we will say so.
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Accreditation with a lender is not an endorsement by it. Which lender suits you is decided by your file, not by who is on this list.
Thinking of Asking Your Parents?
Have the conversation with the facts. Fifteen minutes, all three of you.What Actually Decides It
A Guarantee Is a Debt With Someone Else’s Name on It
A guarantor home loan works because the lender gets a second property to fall back on. Six things follow from that, and the guarantor should understand all six before anyone signs anything.
The guarantor can be liable for the whole loan
ASIC puts it plainly: a guarantor agrees to repay the loan if the borrower cannot, and may have to repay the whole loan plus interest. Not the deposit portion, and not the shortfall. The debt, unless the guarantee has been limited to a set amount in the documents.
Their home is the security and it can be sold
Where the guarantee is backed by their property, ASIC’s warning is that if the borrower defaults and the guarantor cannot pay, the lender may sell their home to recover the debt. That is the actual downside case, and it should be said out loud at the kitchen table rather than discovered in a document.
A limited guarantee caps the amount rather than the exposure
Limiting the guarantee to part of the loan is the structure to insist on. ASIC notes it may limit what you owe, but that you could still lose an asset used as security. So the cap controls how much, and it does not remove the risk to the property itself.
It sits on the guarantor’s own borrowing capacity
ASIC’s advice to guarantors is that if you apply for a loan later, you must tell that lender about any loans you guarantee, and they may decide not to lend to you. A parent planning to downsize, renovate or buy an investment inside the next few years needs to know this before signing, not after.
Getting out afterwards is hard
Challenging a guarantee generally requires showing that you were pressured, misled, or did not understand what you were signing. That is a high bar and a poor plan. The exit is designed at the beginning, in the structure and the release conditions, or it is not designed at all.
Release is a process rather than a date
A guarantee does not fall away automatically when the loan looks healthy. It ends when your own property supports the loan without it, which needs a current valuation and the lender’s agreement, and often a refinance. Extra repayments and the timing of that valuation are the two levers you control.
Checked 31 August 2026. Guarantor liability, the risk to a guarantor’s home, limited guarantees, the effect on future borrowing and the difficulty of exiting a guarantee are all described by ASIC Moneysmart. The scope of the National Credit Code is from ASIC, and Best Interests Duty from ASIC Regulatory Guide 273. Everything else on this page is described in the important information at the foot of the page.
We will not arrange a guarantee without walking the guarantor through all six of these, in front of the borrower, before anything goes to a lender. It is a slower conversation and it is the only responsible version of it. Book the conversation.
The Honest Comparison
Guarantor or Just Pay the LMI?
If you have some deposit, this is the real decision, and it is a family decision rather than a finance one. Here is the case for both.
Buy with a smaller deposit and insure it
- Nobody else is exposed. The risk stays entirely with you
- No family conversation, no independent legal advice, no release to plan for later
- Your parents keep their full borrowing capacity for their own plans
- A real cost, usually added to the loan, and it protects the lender rather than you
- Does not help at all if the deposit gap is the problem rather than the premium
Use a family guarantee
- Can remove lenders mortgage insurance entirely, because the lender holds more security
- Bridges a deposit gap that saving cannot close at current prices
- No money changes hands, and the guarantor’s own loan usually continues unchanged
- Their home secures your debt, and the lender may sell it if neither of you can pay
- Reduces their borrowing capacity until it is released, and the release is not automatic
If your position would not stand on its own within a few years, the answer is not a guarantee. A family guarantee is a bridge across a deposit gap for someone whose income already supports the loan. It is not a way to make a marginal application work, because the thing making it work is somebody else’s house. Where the gap is the premium rather than the deposit, we would often rather you paid lenders mortgage insurance and left your parents out of it, and we will say so even though it is the smaller loan and the harder sell. Where a guarantee is genuinely the right structure, insist on a limited one, get the guarantor their own solicitor, and agree what the release looks like before anyone signs. Those three things cost nothing and they are what separates a guarantee that ends quietly in four years from one that ends badly.
Find Out If You Need the Guarantee at All
We will run the loan with lenders mortgage insurance against the version with a family guarantee before anyone asks your parents. Fifteen minutes. No credit check.The Difference
Two Families in One Conversation
A guarantor loan has two sets of interests in it, and only one of them is applying. We run it as a conversation with both, because the person taking the risk is the one who is usually least informed.
Legally On Your Side
A home loan for a property you will live in is regulated consumer credit under the National Credit Code, which ASIC describes as covering credit provided wholly or predominantly for personal, domestic or household purposes. Best Interests Duty applies, so we must act in your best interests and give priority to your interests where they conflict with ours.
The Guarantor Gets the Full Picture
We explain what they are signing, what a limited guarantee changes, what it does to their own borrowing, and what release actually requires. Then we tell them to take it to their own solicitor. ASIC’s advice is to get advice before signing, and we are not going to be the reason someone skipped that.
No Fee. Not Even Clawback.
We do not charge you for the comparison, the structuring or the application, on any loan type. If you discharge the loan early we wear the clawback ourselves rather than invoicing you for it, which plenty of brokers do. Lenders pay a commission on settlement, disclosed to you in writing before any work begins.
Structured With the Exit Built In
Limited guarantee, sized to the gap rather than the loan. A release trigger everyone understands. A view on when a valuation is worth ordering. None of it costs more at settlement, and it is the difference between a four-year arrangement and an open-ended one.
The Process
How a Guarantor Home Loan Comes Together
Four steps, and the guarantor is in the room from the first one.
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15 minutes
Both positions on the same call
Your income and deposit, and their equity, their loan and their own plans for the next few years. No documents and no credit check. You finish the call knowing whether a guarantee is the right structure, how large it would need to be, and what the alternative costs.
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Before lodging
Sizing the guarantee and setting the release
The guarantee is limited to the amount that closes the gap, not to the whole loan. We agree what the release will require, and the guarantor takes the structure to their own solicitor for independent advice before anything is signed.
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You both gather
Documents
Two sets. We confirm exactly which of these the chosen lender wants before either of you goes looking.
- Photo identification, both parties
- Your two recent payslips
- Your latest tax return or group certificate
- Three to six months of your bank statements
- Evidence of your savings and any gifted funds
- Guarantor’s rates notice and title details
- Guarantor’s existing loan statements
- Guarantor’s income or retirement position
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We manage
From approval through to settlement
Two valuations, two sets of conditions, and a solicitor’s certificate for the guarantor before documents are signed. We coordinate all of it with your conveyancer through to settlement, and we diarise the release conversation rather than leaving it to you to remember.
Track Record
Independent Since 2005
Joe Sukkar started in finance in 2000 and founded the practice five years later. Residential lending sits with Moufid, who has sat at a lot of kitchen tables explaining what a guarantee actually is.
Related Options
Other Ways Into Your First Property
A guarantee is one route. These are the others families land on.
First home buyer loans
The 5 per cent deposit scheme, which removes LMI without involving anyone else’s property.
Joint loans
Buying with a partner or family member, where both are on the loan rather than one guaranteeing it.
Mortgage pre-approval
Knowing your ceiling, with or without a guarantee, before you start inspecting.
Refinance home loan
Usually the cleanest way to release a guarantee once your own equity stands on its own.
Investment loans
For the guarantor, if the plan is to put their equity to work rather than lend it out.
Every home loan we arrange
Back up to the full residential range if none of these is quite it.
Bring Your Parents to the Call.
They are the ones taking the risk. They should hear it first-hand.Questions Answered
Guarantor Home Loan FAQs
The questions borrowers and their parents ask us most often before getting in touch.
What is a guarantor home loan?
A guarantor home loan is a loan where someone else, usually a parent, offers equity in their own property as additional security so you can buy with a smaller deposit. Because the lender holds more security, lenders mortgage insurance can often be avoided. The guarantor does not lend money and does not go on your title.
What is a guarantor actually liable for?
ASIC states that a guarantor agrees to repay the loan if the borrower cannot, and may have to repay the whole loan plus interest. On most family arrangements the guarantee is limited to a set amount rather than the full loan, but that limit only exists if it is written into the documents. Read what is being signed.
Can my parents lose their home if I cannot pay?
In the worst case, yes. Where the guarantee is secured by their property, ASIC’s warning is that if the borrower defaults and the guarantor cannot pay, the lender may sell their home to recover the debt. That is the risk being taken, and it is the reason independent legal advice is not a formality.
What is a limited guarantee?
A limited guarantee caps the amount guaranteed, usually at the size of the deposit gap rather than the whole loan. ASIC notes that guaranteeing only part of a loan may limit what you owe, but that you could still lose an asset used as security. It controls how much, not whether the property is exposed.
Does going guarantor affect my parents’ own borrowing?
Yes. ASIC’s advice to guarantors is that if you apply for a loan later you must tell that lender about any loans you guarantee, and they may decide not to lend to you. A parent planning to downsize, renovate or invest within the next few years should factor that in before signing anything.
When can a guarantee be released?
When your own property supports the loan without the guarantee, and the lender agrees. That generally needs a current valuation showing enough equity, and often a refinance. It is not automatic and no lender promises a timeframe. Extra repayments and the timing of the valuation are the two things you control.
Do we still pay lenders mortgage insurance with a guarantor?
Often not. LMI is generally charged where the loan exceeds 80 per cent of the lender’s valuation, and a guarantee gives the lender additional security which can bring the position inside that. Whether it removes LMI entirely depends on the size of the guarantee, the valuations and the lender’s policy.
Does Best Interests Duty apply, and what does Intellect Finance charge?
Yes it applies. A home loan for a property you will live in is regulated consumer credit, so brokers must act in your best interests and give priority to your interests where they conflict with ours. We charge you nothing on any loan type, and no clawback fee if you discharge early. Lenders pay a commission on settlement.
Visit Us
Penrith Based.Clients Australia-Wide.
Penrith is our head office and the one you can walk into without an appointment. We also meet clients at Parramatta and in the Sydney CBD by arrangement. Most of the process runs by phone, email and video, so we settle guarantor loans in every state.
Parramatta
Suite 23, Level 1, 181 Church St, Parramatta NSW 2150
Mortgage broker Parramatta →Ready When You Are
Have the Conversation With the Facts.
Fifteen minutes with a residential specialist, and bring your parents if they are considering it. We’ll explain exactly what a guarantee commits them to, how a limited guarantee changes it, what it does to their own borrowing, and what releasing it will take. If paying lenders mortgage insurance is the safer answer for your family, we’ll tell you that instead. No credit check, no paperwork, no obligation. Penrith based, clients Australia-wide. Intellect Finance Pty Ltd, ACL 390611.
A home loan for a property you will live in is regulated consumer credit, so Intellect Finance is legally required to act in your best interests under the Best Interests Duty in the National Consumer Credit Protection Act. A guarantor should obtain independent legal advice before signing. Nothing on this page is credit assistance, legal advice or an offer of credit, and no outcome is guaranteed.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member
Important information General information only. Not credit assistance, legal advice or an offer of credit. We charge you no fee. Every caveat and source on this page is collected here. Tap to read.
General information only. The content on this page is general in nature and does not take into account your objectives, financial situation or needs. It is not credit assistance, financial advice, legal advice or tax advice, and it is not an offer of credit. You should consider whether it is appropriate for you and seek your own advice before acting on it.
Guarantors should get independent legal advice. A guarantee is a legally binding commitment with serious consequences. ASIC’s guidance is to get advice before signing, because a guarantee can have financial, tax and legal consequences you may not expect. We are not solicitors and nothing on this page is legal advice. Anyone considering going guarantor should obtain independent legal advice from their own solicitor, and most lenders require evidence that this has happened before documents are signed.
What a guarantor risks. Where a guarantee is secured by property, the lender may sell that property to recover the debt if the borrower defaults and the guarantor cannot pay. A guarantee may also affect the guarantor’s own credit position and their ability to borrow while it remains in place. Limiting a guarantee may cap the amount owed but does not remove the risk to an asset used as security.
Nothing here is a guarantee of approval. Loan approval, borrowing capacity, interest rates, loan to value ratios, valuations, guarantee limits, release conditions and eligibility are determined by individual lenders and by independent valuers, not by us. They differ between lenders and change over time. Any figure or timeframe on this page is indicative and is not a quote, an offer, or a prediction of your outcome. Lenders mortgage insurance is generally charged above 80 per cent of the lender’s valuation and protects the lender rather than you. Document requirements vary between lenders, and timeframes vary with the lenders, the valuations and the complexity of the application.
Release of a guarantee is not automatic. A guarantee ends when the lender agrees to release it, which generally requires the borrower’s own security to support the loan on its own, a current valuation, and the lender’s approval. Conditions differ between lenders and no release timeframe can be promised.
Best Interests Duty. A home loan for a property you will live in is regulated consumer credit under the National Consumer Credit Protection Act 2009. When providing credit assistance in relation to these products, Intellect Finance is required to act in your best interests and, where there is a conflict of interest, to give priority to your interests. These obligations have applied to mortgage brokers since 1 January 2021.
How we are paid. Intellect Finance does not charge borrowers a fee for arranging finance, and does not charge a clawback fee where a loan is discharged early. Lenders pay us a commission on settlement. The basis of that commission is disclosed to you in writing in our Credit Guide before any credit assistance is provided.
Third-party information. Where this page refers to regulatory settings, consumer guidance or lender policy, that information is sourced from the relevant authority and was correct to the best of our knowledge at the date shown on this page. Those rules change, sometimes without notice. Always confirm the current position with the issuing authority or with us before relying on it.
Found something wrong? If you believe anything on this page is inaccurate or out of date, tell us at joe@intellectfinance.com.au and we will review and correct it.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member