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Know your finances

For home buyers struggling to break into the market, guarantor home loans can be a great option for reaching that first rung on the property ladder.

Before you get started on this journey, however, it’s important for you to have a precise knowledge of your current and future financial situation.

What will your deposit be?

For most home buyers nowadays (particularly in major cities), the large deposit amount required is the biggest stumbling block. Before you reach out to your guarantor for help with your deposit amount, get an idea of the property price range you’ll be buying in, and what your deposit will need to be.

Generally, a 20% deposit is required to avoid paying Lender’s Mortgage Insurance. Once you know this deposit figure, you can compare it against your deposit savings to know how much your guarantor will be committing to.

Read our how-to guide on deposit saving

What will your repayments be?

With your property price range in mind, you can then go ahead and calculate what your ongoing repayments will be, once your loan is approved. Knowing this figure now is vital – If you are asking your guarantor to help with securing your loan, your guarantor’s property may be at risk if you begin to default on your repayments.

Make sure you don’t get in over your head early, and avoid disappointment later.

Use our home loans repayments calculator

Secure your guarantor

Once you have a clearer picture of the financial situation, you should have a chat with your potential guarantor. Most buyers who opt for a guarantor loan reach out to parents or family.

It’s important that both parties understand the pros and cons of guarantor (or family pledge) loans.

Our Family Pledge Loan

Guarantor finances

Just as it helps your guarantor’s peace of mind to know your financial situation is secure, as the buyer, you should make yourself aware of the financial situation of your guarantor. Transparency is key if this relationship is to work.

Family matters

The closer you are to your guarantor, the more likely they are to help you with your loan, but in the event that the guarantor relationship breaks down, make sure you’re both able to work together so that both parties are protected.

Legal advice

Once you and your guarantor have agreed to terms, make sure you run the situation past your legal or financial professional so that both parties fully understand the deal.

Talk to the experts

When you and your guarantor are at a stage where you’re ready to apply, make sure you speak to an expert lender.

At Greater Bank, we’re renowned for our responsible lending practices, and with your best interests at heart, we’ll walk you through your options when it comes to guarantor or family pledge loans.

With competitive interest rates, and a range of simple, helpful loan products to choose from, a Greater Bank lender will be with you every step of the way

Get the right cover

Once you’ve settled, and you’re handed the keys to your brand new home, you should re-consider your level of insurance to make sure both your biggest asset and your guarantor are covered.

Get a quote Get a quote Home and Contents Insurance

Your question answered

Can I borrow 100% with a guarantor?

Yes, most lenders will let you borrow up to 100% of the purchase price of your new home, or even slightly more, if you have a guarantor.

Be sure to check with your lender to see how much of your purchase price they will let you borrow in your individual circumstances.

Can you get a mortgage with a guarantor?


If you have been lucky enough to secure a guarantor for your mortgage, in most cases you'll be able to secure a home loan with little or no deposit, and avoid paying Lenders Mortgage Insurance (LMI).


How much of a deposit do you need if you have a guarantor?

Obviously, the larger deposit amount you're able to save, the smaller your loan amount to repay will be. 

However, depending on your lender, you may be able to loan up to 100% of the purchase price of your property (and in some cases a little more than this) if you have a guarantor in place.

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*Conditions, fees and charges apply to all loans. Subject to meeting Greater Bank's lending criteria.

Greater Bank, part of Newcastle Greater Mutual Group Ltd ACN 087 651 992 Australian Financial Services Licence/Australian credit licence 238273 

++$2,000 cashback for loans ≥$250,000 or $2,500 cashback for loans ≥$500,000. Only one (1) Cashback Payment per eligible loan, and for first eligible loan only. Not available in conjunction with any other promotional payment. Offer may be varied or withdrawn at any time. See the full Cashback Offer Terms and Conditions. Terms, conditions, fees, charges and credit criteria apply.

~At the end of the fixed rate period customers can chose to re-fix their loan for another fixed rate period or let the loan revert to the applicable variable interest rate based on the loan and repayment type.

^Comparison rate is based on $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

#Discounted rates include a discount on Home Loans of $150,000 or over and for owner occupied Home Loans with an LVR 80% or below and for investment Home Loan with an LVR 80% or below and apply to new borrowings only. Discounted rate not available for Line of Credit facilities.

+Additional costs may apply if your loan has a fixed rate.

All new interest-only home loans, attract a 0.10% p.a. margin above the applicable Principal and Interest base rate. All new Line of Credit home loans, attract a 0.10% p.a. margin above the applicable Line of Credit base rate. The all-up interest rate which includes any margins, will be set out in your credit contract. View our Terms and Conditions.

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