In many Western Sydney families, parents want to help their children buy but don't have spare cash. A family guarantee lets them help using the equity in their own home instead.
How it works
The lender takes a mortgage over part of your guarantor's property as additional security. The guarantee usually covers only the portion of your loan above 80% of your property's value, plus costs. Because the lender has extra security, it treats your loan as if you had a 20% deposit, so lenders mortgage insurance usually isn't needed.
Who can be a guarantor
Usually parents, and with some lenders grandparents, siblings or other close family. The guarantor needs enough equity in their property and must be comfortable with the risk.
Getting out of the guarantee
As you pay the loan down and your property grows in value, you can apply to release the guarantee once your loan is around 80% of the property's value. We track this and help you refinance or restructure when the time comes.
Guarantee or 5% Deposit Scheme?
If you're eligible for the 5% Deposit Scheme, it may avoid involving family altogether. A guarantee can suit buyers above the price cap, with less than 5% saved, or who aren't eligible for the scheme.
Talk through the options as a family
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