MFAA Member · ACL 389328 · Family-Pledge Specialists
Guarantor Home Loan — Buy without a 20% deposit.
Family-pledge home loans let your parents use their property equity to back your loan — skipping the 20% deposit hurdle and skipping LMI entirely. No cash changes hands. Set up correctly, it's the safest pathway into your first home with family support.
Skip LMI entirely.
Lenders Mortgage Insurance can cost $15,000-$30,000 on a typical first home loan. Guarantor structure skips it completely — your parents' pledge serves the same function.
Buy sooner.
Without a guarantor, you need 5-20% deposit ($25k-$120k on a $600k property). With a guarantor, you can sometimes buy with zero deposit + closing costs only ($10-15k).
Parent-safe structuring.
We walk parents through the risk explicitly. Only the pledged portion is at risk — not their whole property. We schedule release reviews so the guarantee doesn't sit longer than necessary.
From first call to settlement
Easier than you'd think.
Initial conversation
We talk through the structure with you. If it's a fit, we then talk to your parents separately about their risk and obligations.
Parents seek independent advice
Most lenders require parents to obtain independent legal + financial advice before signing. We coordinate this.
Application
Your loan + parents' guarantee documented together. Both parties sign. Pre-approval typically 5-10 business days.
Annual release review
We track your LVR annually. Once below 80%, we initiate the guarantor release process. Pledged security returns to parents.
Frequently asked questions.
Can my parents help me buy without giving me cash?
Yes — through a guarantor structure. Your parents pledge a portion of their property's equity as additional security on your loan. No cash changes hands. The bank treats you as having a 20%+ deposit, skipping LMI and letting you borrow at standard rates.
What's the risk to my parents?
Their pledged equity (typically 20% of your purchase price) is at risk if you default and the bank can't recover from your property. The rest of their property is not at risk. We walk parents through this explicitly and recommend they seek independent legal + financial advice before signing.
When does the guarantee get released?
Once your loan balance drops below 80% of your property's value, your parents can request release of the pledged security. You don't need to refinance — the bank removes the pledge. Typically takes 5-10 years depending on repayment speed + property value growth.
Do my parents need to own their property outright?
No — they just need enough equity in their property to pledge (typically 20% of your purchase price). Their existing mortgage stays separate. Many guarantor parents still have small home loans of their own.
Can I have more than one guarantor?
Yes — siblings, both parents, multiple family members can combine to provide a larger guarantee. Lender appetite for multi-guarantor structures varies — we know which lenders are comfortable with combined guarantees.
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