Our Family Guarantee is structured as two separate loans. The first loan is secured by the home you buy, and is for the majority of that property’s value. The second, smaller loan is considered to be the guarantor loan. It’s secured by the house you’re purchasing, as well as a portion of the equity in your guarantor’s property.
You need to make the minimum monthly repayments on both loans yourself. Keep in mind that your guarantor will be liable for the part of the loan that’s secured against their property if you’re unable to make the repayments – but they don’t have to be liable forever. Once you’ve paid off the second loan, you can apply to remove the guarantee. You could even pay extra off the smaller loan if you want to release the guarantor’s property as soon as possible. Note that early loan repayment fees may apply on some home loans.
You need to buy the property to live in, and not own any another property. Your guarantor needs to be an immediate adult relative. This means your mum, dad, brother, sister, grandparent, spouse, de facto or child. If they have a home loan with another lender, they’ll need to move their home loan to us. See more about what it means to refinance.