Guarantor Home Loans

Support When You Need It Most

If you’re looking to purchase a home but don’t have a large enough deposit, or your credit history needs improvement, a guarantor loan might be a viable option. These types of loans allow a close family member, usually a parent, to use the equity in their own property as additional security for your loan.

This structure can help you enter the property market sooner, reduce your reliance on personal savings, and, in some cases, avoid paying Lenders Mortgage Insurance (LMI).

The Benefits

  • Enter The Market Sooner

    Avoid the long wait to save a 20% deposit.

  • Potentially Reduce or Avoid LMI

    A lower loan-to-value ratio (LVR) can improve loan terms.

  • Improve Your Credit Profile

    If managed well, your repayments help establish a stronger credit history.

  • Retain Full Ownership

    The guarantor’s name does not appear on the property title.

  • A guarantor loan operates similarly to a standard home loan, with one key difference: a third party—known as the guarantor—offers their own property equity as security for a portion of your loan. This added security reduces the lender’s risk, potentially giving you access to more favourable loan conditions.

    The guarantor does not provide any cash, and they aren’t required to make repayments unless you default. However, they do take on a legal and financial responsibility for the guaranteed portion of the loan, so careful consideration is essential.

  • Most lenders require guarantors to:

    • Be over 21 years old

    • Own property with sufficient equity

    • Have a clean credit history

    • Be a close family member—commonly a parent, but in some cases siblings or grandparents may be accepted

    Because guarantor loans carry legal and financial risk, lenders typically require all parties to seek independent legal advice before proceeding.

  • Guarantor loans do come with risks. If you are unable to meet your repayment obligations, the lender may take action to recover funds from your guarantor. This could place their property or financial position at risk.

    For the borrower, it’s important to fully understand the long-term responsibility of the loan and ensure it aligns with your financial goals. Communication with your guarantor is key, and both parties should be fully informed before signing any agreements.

  • Once your property has built up sufficient equity—either through capital growth or regular repayments—you can apply to have the guarantee removed from the loan. Each lender has specific requirements around this, and there may be fees involved, but release is often possible within a few years, depending on the loan structure and market conditions.

How Vita Finance Can Help

At Vita Finance, we regularly work with first-home buyers and young professionals who are considering guarantor loan structures. These loans can offer real opportunities, but they require careful planning.

We will:

  • Assess whether a guarantor loan suits your individual circumstances

  • Help you and your guarantor understand the risks and responsibilities

  • Identify lenders who are supportive of guarantor structures

  • Guide you through the legal and financial steps involved

Our role is to give you clarity and confidence, so you can make an informed decision that supports your long-term goals.

Get in touch with Vita Finance to explore your options and learn how a guarantor loan could support your journey into property ownership.