Let’s be real—getting into the Perth property market isn’t easy, especially for first-time buyers.
As of July 2025, Perth’s median house price has climbed to $819,885, continuing its strong upward momentum from earlier in the year. That means a first home buyer aiming to avoid Lenders Mortgage Insurance (LMI) would need to come up with roughly $202,400 for a 20% deposit. That’s no small feat—especially with sky-high rents making it harder than ever to save.
But there is a way to get into the market sooner—without a 20% deposit and without paying LMI.
Some lenders offer guarantor loans, allowing parents to use the equity in their own home to support their child’s property purchase.
？ What Is a Guarantor?
A guarantor is usually a parent or close family member who offers part of their own property as security for the borrower’s loan. This allows the buyer to borrow up to 100% of the purchase price—no deposit required—and sidestep the extra cost of LMI.
This setup can make a huge difference. It may allow your child to:
- Buy sooner
- Afford a home in a better location
- Avoid compromising on size or lifestyle
💡 What Are the Risks?
As helpful as a guarantor loan can be, there are a few things to consider before signing on.
Because you’re offering your own home (or part of it) as security, you’re legally agreeing to cover the debt if your child can’t. That’s a big responsibility—and one worth thinking through carefully.
Ask yourself:
- Are you planning to sell or refinance your home soon?
- Will offering this guarantee impact your own borrowing power?
- Are you prepared to cover the loan if your child defaults?
- Do you have an exit strategy to remove the guarantee in the future?
Most lenders will require both parties to get independent legal advice before proceeding—this protects everyone involved and ensures you fully understand the obligations.
🔐 Alternatives
Not quite ready to commit as a guarantor? There are other ways to help:
1. Gift or Private Loan
You could use your home equity to borrow and gift (or loan) the deposit amount directly. If loaning, we recommend getting a formal loan agreement drawn up.
2. Buy Together
You might co-purchase the property with your child, holding a share of the title. Just note this could affect first home buyer benefits and result in additional tax implications.
👋 Start with the Right Advice
Whether you’re exploring guarantor options or considering other ways to help your child enter the market, it pays to get the right advice up front.
At Fox Mortgages, we’ve helped countless Perth families structure smart, safe solutions that bring first homes within reach—without putting everything on the line.
📞 Ready to explore your options?
Let’s have a chat about how you can support your child’s home ownership dreams while protecting your financial future.
👉 Call us on (08) 9304 9682 or book an appointment