Getting approved for your first loan can take some time. Having a guarantor can help you get there more easily and quicker. A guarantor can be anyone from an immediate family member to a close friend (depending on the lender’s criteria). There are many potential risks with having a guarantor or being a guarantor, but the benefits can be considerable.

A guarantor home loan means that the guarantor will become responsible for paying back the loan of the original borrower cannot. This usually requires the guarantor to offer equity (i.e., A percentage of their own home) as security for part or all of your mortgage.

Usually, a small deposit or possibly no deposit at all is necessary.


  • Having a guarantor may help you avoid paying Lenders Mortgage Insurance (LMI). A fee paid by the borrower to protect the lender against financial loss if the borrower is unable to meet their repayments.
  • Can help you secure a loan if you do not have enough saved for a 20% deposit


  • The highest risk is for the guarantor and so the decision to become one should be carefully considered. This can also put strain on your personal relationship with the guarantor
  • If you are unable to meet the repayments, both yours and the guarantors credit report could be negatively impacted

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