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What's is Family Security Guarantee?

If you’re finding it tricky to get a reach deposit with 20% or higher on your home loan, that’s where a Family Security Guarantee comes in.

It allows a family member to act as guarantor so that you can secure your deposit. This allows you to have more borrowing power and reduce your LVR, which ultimately saving you thousands in mortgage insurance cost.

For example, let’s say you want to borrow $270 000 to buy a property valued at $300 000.

Loan amount / Property value = LVR

$270 000 / $300 000 x 100 =90%

With an LVR of 90% , LMI is applicable which is added cost. However, if you were to added Family Security amount $40 000 as additional security, the LVR on your loan reduces.

With a new LVR of 79%, LMI would no longer be required, which could a significant savings,

Therefore the main benefits for borrower with a family security guarantee.

1. More borrowing power

  • Allows you to borrow up to 100% of the purchase price, plus costs like Stamp Duty and Legal fees.

2.More to save

  • A guarantee can help you reduce or avoid Lender’s Mortgage Insurance, saving you money when you need it most.


Information for the Guarantor

Know the risks

If you are thinking about a guarantor in Family Security Guarantee, there are few things you should be aware of first

  • It’s a big decision to make and commitment , you must ensure comfortable with the borrower’s financial situation
  • You’ll be liable for the amount you guarantee, This means that you promise to pay the bank that amount if 

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