How to Use a Guarantor to Buy Property Sooner
- namchau
- Aug 1
- 2 min read
Saving for a deposit is one of the biggest hurdles for home buyers—especially when property prices keep rising faster than you can save. But what if there was a way to buy now, even without a full deposit?
That’s where a guarantor loan can be a game-changer.
Whether you're a first home buyer or someone re-entering the market, using a guarantor can fast-track your journey to home ownership—without needing to wait for years to save a 20% deposit.
What is a Guarantor Home Loan?
A guarantor home loan is where someone (usually a parent or immediate family member) offers the equity in their property to secure your loan. This allows you to:
Buy with no deposit
Avoid Lender’s Mortgage Insurance (LMI)
Borrow up to 100% (or more, depending on stamp duty)
Instead of needing a deposit, your guarantor's property provides the security that the bank needs.
Example Scenario
You're looking to buy a home for $600,000.
Without a guarantor: You’d need at least $120,000 for a 20% deposit—or $30,000 + LMI for a 5% deposit.
With a guarantor: You may need no deposit, and you can avoid LMI, which could save you $10,000–$20,000.
That’s real savings and real progress—faster.
Who Can Be a Guarantor?
Most lenders require the guarantor to be:
A parent or legal guardian
In some cases, an immediate family member (e.g. sibling or grandparent)
A property owner with sufficient equity (typically 20% or more)
Importantly, the guarantor doesn’t give you money—they simply allow the bank to use a portion of their home’s equity as security.
How Does It Work?
You apply for a home loan through Ascot Mortgage.
Your guarantor agrees to use part of their property’s equity as security.
The loan is approved, and you buy your home.
Over time, as you repay your loan and your property increases in value, the guarantor can be released—often after 2–5 years.
Common Concerns
Q: Does my guarantor become responsible for the entire loan?
A: No. They’re only liable for the guaranteed portion (usually up to 20%). Their responsibility only comes into play if you default.
Q: Can I still use a guarantor if I have some savings?
A: Yes! A partial deposit can reduce your borrowing amount and shorten the guarantor’s commitment.
Q: What if my guarantor still has a mortgage?
A: As long as they have enough equity, they may still qualify. We’ll help assess this for you.
Who is it Ideal For?
First-home buyers struggling with a deposit
Couples or individuals with strong income but little savings
Young professionals wanting to enter the market sooner
Final Thoughts
A guarantor loan isn’t for everyone—but for the right buyer, it can mean the difference between buying now or waiting years. At Ascot Mortgage, we’ve helped hundreds of home buyers structure guarantor loans that work for them—and their families.
Let’s chat.
If you think a guarantor might help you get into the market sooner, contact us for a free Home Buying Plan. We’ll show you what’s possible and walk you through every step.
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