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step 1

Know your finances

For home buyers struggling to break into the market, guarantor home loans can be a great option for reaching that first rung on the property ladder. Before you get started on this journey, however, it’s important for you to have a precise knowledge of your current and future financial situation.

  1. What will your deposit be?

    For most home buyers nowadays (particularly in major cities), the large deposit amount required is the biggest stumbling block. Before you reach out to your guarantor for help with your deposit amount, get an idea of the property price range you’ll be buying in, and what your deposit will need to be.

    Generally, a 20% deposit is required to avoid paying Lender’s Mortgage Insurance. Once you know this deposit figure, you can compare it against your deposit savings to know how much your guarantor will be committing to.

  2. Your repayments

    With your property price range in mind, you can then go ahead and calculate what your ongoing repayments will be, once your loan is approved. Knowing this figure now is vital – If you are asking your guarantor to help with securing your loan, your guarantor’s property may be at risk if you begin to default on your repayments.

    Make sure you don’t get in over your head early, and avoid disappointment later.

    Use our repayments calculator

step 2

Secure your guarantor

Once you have a clearer picture of the financial situation, you should have a chat with your potential guarantor. Most buyers who opt for a guarantor loan reach out to parents or family.

It’s important that both parties understand the pros and cons of guarantor (or family pledge) loans.

  1. Guarantor finances

    Just as it helps your guarantor’s peace of mind to know your financial situation is secure, as the buyer, you should make yourself aware of the financial situation of your guarantor. Transparency is key if this relationship is to work.

  2. Family matters

    The closer you are to your guarantor, the more likely they are to help you with your loan, but in the event that the guarantor relationship breaks down, make sure you’re both able to work together so that both parties are protected.

  3. Legal advice

    Once you and your guarantor have agreed to terms, make sure you run the situation past your legal or financial professional so that both parties fully understand the deal.

step 3

Talk to the experts

When you and your guarantor are at a stage where you’re ready to apply, make sure you speak to an expert lender.

At Greater Bank, we’re renowned for our responsible lending practices, and with your best interests at heart, we’ll walk you through your options when it comes to guarantor or family pledge loans.

With competitive interest rates, and a range of simple, helpful loan products to choose from, a Greater Bank lender will be with you every step of the way

step 4

Get the right cover

Once you’ve settled, and you’re handed the keys to your brand new home, you should re-consider your level of insurance to make sure both your biggest asset and your guarantor are covered.

  1. Home & Contents Insurance

    There’s nothing quite like the peace of mind that comes with knowing the house you’ve worked so hard to make your home is covered against the unexpected.

    Get a quote online

  2. Loan Protection Insurance

    No-one likes to think the worst, but if something were to happen to you that impacted your ability to repay your loan, how would you cope?

    Meeting your commitments after an unexpected turn of events is possible with the right Loan Protection Insurance.

    Find out more

Enquire About A Home Loan

If you are after some more information, a loan pre-approval or are ready to apply for a home loan, start a conversation with a Greater Bank lending expert today to help you get what you want sooner.