Family guarantee loans

A Family Guarantee Loan allows families to assist their children in purchasing a property without providing a cash gift or loan.  It could also allow borrowers to include some of the costs of purchasing, such as stamp duty and legal costs, in the loan amount. A guaranteed loan is, for example, a family member who can help you secure a home loan by agreeing to offer their property as additional security for your loan.  

With a guarantor loan, you can borrow up to 100% of the property purchase price. This will depend on the lender, the guarantor’s financial situation and how much of the loan they’re willing to be responsible for. 

Like any financial product, a guarantor loan can be risky, particularly for the guarantors. 

The guarantor is ultimately liable for your loan if you fail to make the repayments. If you cannot repay your loan, the guarantor is responsible for covering the mortgage repayments. If they cannot do so, the guarantor could be forced to sell their home to repay the loan.