Buying your first home is a big step, but with the right preparation, it doesn’t have to be overwhelming. Here are a few smart steps to take before you start house hunting:
Check your borrowing power to get a clear idea of what you can afford
Review your savings and set a goal for your deposit (typically 5–20%)
Understand upfront costs, like stamp duty, legal fees, and inspections
Check your credit score and tidy up any debts
Get pre-approved so you can make offers with confidence
The more prepared you are, the smoother the buying process will be.
A guarantor home loan is a type of home loan in which a borrower can secure a mortgage without any deposit by having a family member act as a guarantor. This allows homebuyers to borrow 100% to 110% of the property’s purchase price.
A guarantor on a mortgage is a family member, usually a parent, who provides their property as security for the loan. Typically, 80% of the loan is secured against the purchased property, while the remaining balance is covered by the guarantor’s equity as the guarantee amount.
The guarantor doesn’t give you money but uses the equity in their property to secure part of your loan—usually the 20% deposit you’re missing. This helps reduce your loan-to-value ratio (LVR), which can eliminate Lenders Mortgage Insurance (LMI) and improve your borrowing capacity.
Over time, once you’ve built enough equity, you can apply to remove the guarantor from the loan.
Most lenders require a close family relationship. Typically accepted guarantors include:
Parents or legal guardians
Co-borrower’s parents
Grandparents
Siblings (case by case)
Spouse or de facto partner
Adult children (in rare situations)
Friends or distant relatives generally aren't eligible.
With a guarantor, some lenders may allow you to borrow up to:
105% of the property value for a home purchase
105% for house and land or construction loans
100% for refinancing
Up to 110% for debt consolidation and purchase
105% for investment properties
This extra borrowing capacity can cover upfront costs like stamp duty, legal fees, and even moving expenses. The exact amount depends on your income, credit history, and the guarantor’s financial situation.
