Mortgage Glossary

What is Guarantor Loan?

A home loan where a family member uses equity in their own property to help guarantee part of your loan.

A guarantor (often a parent) offers equity in their own property as additional security, which can allow you to borrow with a smaller deposit — sometimes avoiding LMI altogether. The guarantor's liability is usually limited to an agreed portion of the loan, and can typically be released once you've built enough equity or paid down the loan sufficiently. It's a significant commitment for the guarantor, so it's worth discussing carefully with everyone involved.