Step Into Your First Home
Sooner With Family Support
Saving a large deposit can take years while property prices keep rising. A guarantor loan lets a trusted family member use their equity to help you enter the market faster — and potentially avoid LMI entirely.
The guarantor loan explained
A family member (usually parents) uses equity in their own property as additional security for your loan — reducing your deposit requirements and unlocking better conditions.
Family equity as security
Your family member's property equity acts as extra collateral, reducing your required deposit significantly.
Enter the market faster
Stop waiting years to save a full deposit while property prices continue to climb.
Avoid LMI completely
The bank treats your loan as 80% LVR, waiving Lenders Mortgage Insurance worth $10k–$35k.
Borrow up to 105%–110% of the purchase price
One of the biggest secrets of guarantor loans — the extra 5–10% covers the hidden costs of buying that many first home buyers forget about.
Stamp duty
$30k+ in Adelaide & other capitals
Legal & conveyancing
Solicitor and settlement fees
Registration fees
Government transfer & mortgage costs
Inspection costs
Building & pest inspections
The 'Genuine Savings' rule
Even with a guarantor, most Australian lenders still require 3%–5% in genuine savings (money saved in a bank account over 3+ months) to prove you have the financial discipline to manage a mortgage.
Limited vs. full guarantee
Understanding the difference is critical. At Kubaer Finance, we strictly recommend limited guarantees to protect your family.
Limited guarantee
The guarantor is only responsible for a specific dollar amount (e.g., $100,000). Once the borrower pays down the loan by that amount, the guarantor's responsibility ends automatically.
Full guarantee
The guarantor is responsible for the entire loan if the borrower defaults. This means the family member's property could be at risk for the full amount of the mortgage.
The "Three Ds" and other key risks
A guarantee is usually only called in under serious circumstances. Guarantors must consider their own financial buffer before signing.
D1
Death
Unexpected passing of the borrower triggers the guarantee call.
D2
Divorce
Relationship breakdown can lead to forced sale and potential shortfall.
D3
Debt (job loss)
Sustained inability to make repayments due to unemployment.
Releasing the guarantor as soon as possible
A guarantor loan should never be a 30-year commitment. The goal is to remove the guarantee at the earliest opportunity through one of two paths.
Capital growth
Your home increases in value (e.g., $600k → $750k), pushing your LVR below 80% without extra repayments.
Debt reduction
Make extra repayments to bring the loan balance down to 80% of the property's value.
Pro tip — valuation review every 2 years
If your equity has reached 20%, we can apply for a "Partial Release" to remove your parents from the loan entirely — no refinancing required.
What you need to apply
Both the borrower and guarantor need to prepare documentation. Here is what each party must provide.
Borrower documents
Guarantor documents
Independent legal advice is mandatory
All lenders require the guarantor to obtain independent legal advice before signing. This typically costs $500–$1,500 and ensures the family's interests are fully protected.
Lenders we work with
Each major bank has its own branded guarantor product. We compare all options to find the right fit for your family's situation.
Major banks (Big 4)
Second-tier & regional
Customer-owned & mutual
Specialist & non-bank
Common questions
Everything families ask before setting up a guarantor loan.