The dream of home ownership is becoming harder for many Australians, especially for younger buyers trying to save a deposit while juggling rising rents and living costs. But in today’s market, there’s a lesser-known strategy helping many first home buyers get into the property game sooner — with confidence. It’s called a Family Guarantee.
And no — it doesn’t mean borrowing money from your parents.
What Is a Family Guarantee?
A Family Guarantee (also known as a guarantor loan) allows a close family member — usually a parent, but can be a sibling or close family relative — to use the equity in their home to help secure part of your new home loan. Rather than giving you money, they offer a guarantee secured against a portion of their own property.
The result? You can:
- Borrow up to 106% of the purchase price
- Avoid Lenders Mortgage Insurance (LMI), which can save tens of thousands
- Potentially get a more competitive loan rate
It’s a clever, cash-free way for parents to support their kids’ home ownership goals — without compromising their own financial position.
Why It’s Gaining Momentum
In the current climate of high property prices, rising inflation, and tighter lending, we’re seeing more and more families explore this as a practical solution.
Here’s why:
- The cost of LMI on low-deposit loans is becoming a serious barrier
- Many parents want to help but aren’t in a position to gift large sums
- A Family Guarantee keeps things structured, safe, and fully documented by the lender
Key Things to Know
While it’s a powerful strategy, it’s not for everyone — and it should always be approached with clear guidance and full transparency.
At Fox Mortgage Services, we ensure both the borrower and guarantor understand the process, responsibilities, and how to unwind the guarantee in the future (which is usually possible once sufficient equity has built up).
Some key facts:
- The guarantee is typically limited to a percentage of the loan, not the full amount
- Guarantors aren’t responsible for repayments unless the borrower defaults
- The guarantee can be released once the borrower builds 20% equity
- Legal advice may be required
We guide families through these conversations with clarity and care — because money and family don’t always mix unless the process is handled well.
Real-Life Results
We’ve helped dozens of Perth families implement this strategy safely—and the outcomes speak for themselves.
✅ First-time buyers moving into their own homes 2–3 years earlier
✅ Families saving $20K+ on LMI fees
✅ Parents feeling reassured they’re helping without risk
Final Thoughts
In a market that isn’t making things easy for new buyers, a Family Guarantee can be the leg-up many need.
If you’re a parent who wants to help (without dipping into your super), or a first home buyer wondering how to bridge the deposit gap — 🔗book an appointment.
We’re here to make it easy, personal, and safe — just the way finance should be.
Paul Fox is the owner of Fox Mortgage Services, helping Perth locals find tailored, stress-free finance solutions since 2016. If you want to explore the Family Guarantee option, feel free to connect or reach out directly.
Get in touch: 🔗 www.foxmortgages.com.au/contact