Family Guarantee Home Loans
Buy sooner with help from family — and avoid Lenders Mortgage Insurance
At My Finance Consultants, we understand that saving a deposit can feel endless when prices keep climbing. A Family Guarantee Home Loan lets a parent (or eligible relative) use equity in their property as additional security, lowering your LVR so you can avoid LMI and get into the market sooner. As you repay and your property grows in value, the guarantee can be released.
How a family guarantee works
The lender takes a mortgage over your new property and a limited guarantee secured against part of your parents’ (or guarantor’s) property. Over time, once your loan is below 80% LVR, we arrange to discharge the guarantee, leaving your parents’ home unencumbered.
Quick tools:
Estimate repayments with our Mortgage Repayment Calculator.
Check costs with our Stamp Duty Calculator.
Common guarantee types
Security guarantee (most common)
Parents use equity in their property to guarantee the portion of your loan above 80% LVR so you can avoid LMI.
Servicing guarantee (less common)
A family member helps meet servicing and may need to be on title. This can impact grant eligibility and is used selectively.
Benefits for first home buyers
Buy sooner with a smaller cash deposit
Avoid Lenders Mortgage Insurance (LMI) by reducing your LVR
Keep your savings for moving costs, furnishings, or an emergency buffer
Plan an exit: remove the guarantee once your equity grows or your balance reduces
Important considerations for guarantors
Your property is used as security for a limited amount
May affect your borrowing capacity and retirement plans
You should be comfortable covering the guaranteed portion if things go wrong
Independent legal advice is often required (and recommended)
We work with both the borrower and guarantor to explain obligations, set a clear exit strategy, and structure the loan correctly from the start.
Eligibility & what lenders look for
Borrower’s income, expenses and credit history
Guarantor’s equity position and overall financial standing
Combined ability to service the loan and maintain buffers
Acceptable property and LVR within policy (some lenders set lower caps)
Quick tools:
What can I borrow? Try our Borrowing Power Calculator.
What price range suits? Try our Buying Power Calculator.
Our process
Strategy & checks
We confirm eligibility, deposit position, and whether a guarantee is the right fit.
Compare 40+ lenders
We shortlist policies that best suit your scenario (including guarantor rules and LMI outcomes).
Structure & documentation
We set up a limited guarantee, outline exit triggers, and coordinate independent legal advice.
Approval, settlement & release plan
We manage approval, settlement, and the future release of the guarantee once targets are met.
Alternatives to a family guarantee
Gifted funds or a private loan from family (with or without security)
Joint purchase with a parent (note: grant implications)
Government schemes (where eligible)
Saving to 20% deposit or using a smaller LMI with no guarantee
Frequently Asked Questions
How do I know if a family guarantee is right for me?
It suits buyers with strong income but limited cash deposit, and parents with solid equity who are comfortable providing limited security.
Who can be a guarantor?
Usually parents. Some lenders allow other close relatives (For example, grandparents or siblings) — subject to policy.
Do my parents need to be employed?
Policies vary. Some lenders accept self-funded retirees if equity is sufficient; others assess guarantor servicing.
How is the guarantee amount set?
It’s typically limited to cover the portion above 80% LVR, keeping the guarantor’s exposure capped.
Can the guarantee be released later?
Yes — once your loan falls under 80% LVR (via repayments or capital growth), we arrange to discharge the guarantee.
Are there extra costs?
Expect additional valuations, mortgage registration on the guarantor’s title, possible lender fees, and independent legal advice costs.