Guarantor Loan Calculator
See how a parental guarantee lets you buy with a small deposit, skip LMI, and how much of your parent's home equity sits on the line until you are released.
Your purchase
5.0% of price.
Single applicant income.
Sets the 5% Deposit Scheme price cap.
Your loan
Your guarantor
Enter 0 if their home is paid off.
Suggested: $112,500 (covers the part of the loan above 80% of the price).
Total loan with a guarantor
$712,500
A $150,000 guarantee covers the part of the loan above 80% of the price, so LMI may be waived, avoiding an estimated $24,938 premium. Your guarantor's pledge stays on their title until release.
- Security LVR
- 79.2%
- LMI
- Waived
- Guarantee pledged
- $150,000
Policies vary by lender
Parent's effective LVR rises from 0% to 17%
Forced sale in year 1 could cost parent up to $98,037
You may be eligible for the 5% Deposit Scheme instead
Loan structure with guarantor
The part of the loan over 80% of your home is secured by your guarantor's pledge.
- Primary portionUp to 80% of your home
- $600,000
- Guaranteed portionSecured by your guarantor
- $112,500
- Combined LVRLoan divided by your home
- 95.0%
- Security LVRLoan divided by your home plus the pledge
- 79.2%
- LMI statusPledge covers the part above 80%
- Waived
Three paths to buy with a small deposit
Guarantor, pay-LMI, and the First Home Guarantee (5% Deposit Scheme) all get you into a home with less than 20% down. The tradeoffs are different.
| Path | Deposit | Loan | LMI | Monthly | Pledge |
|---|---|---|---|---|---|
| Pay LMI (no scheme)Standard path. You pay LMI because your LVR is above 80%. | $37,500 | $712,500 | $24,938 | $4,836 | - |
| First Home Guarantee (5% Deposit Scheme) Within price capQLD price cap: $1,000,000. Since October 2025: unlimited places, no income cap. First-home rules also apply. | $37,500 | $712,500 | Waived | $4,836 | - |
| Guarantor loan LMI waivedParent pledges equity as extra security. Risk shifts from insurer to parent. | $37,500 | $712,500 | Waived | $4,836 | $150,000 |
Housing Australia and the lender make the final eligibility decision for the 5% Deposit Scheme. See full lifetime comparison
Your guarantor's risk
The numbers worth talking through with your guarantor before anyone signs: what their home is putting on the line.
- Pledge amount16.7% of their home
- $150,000
- Max exposure (stress)Worst of 3 scenarios
- $98,037
- Parent's LVR beforeDebt divided by home value
- 0%
- Parent's LVR afterEffective with pledge
- 17%
Three scenarios to talk through
| Scenario | Parent's exposure | Outstanding | Sale proceeds | Shortfall | Parent equity after |
|---|---|---|---|---|---|
| Forced sale year 1, market -10%Job loss, quick sale into a soft market. Sale covers ~81% of original price after costs. | −$98,037 | $705,537 | $607,500 | $98,037 | $801,963 |
| Default year 3, flat marketBorrower defaults after 3 years. Sale costs take 10% off the original price. | −$15,017 | $690,017 | $675,000 | $15,017 | $884,983 |
| Successful release ~year 3.5Primary loan reaches 80% LVR at 4.0% annual growth + standard repayments. Guarantor released, exposure goes to $0. | $0 exposure | - | - | - | - |
Exposure is capped at the pledged amount, so a parent cannot lose more than that. Actual outcomes depend on the lender, the market, sale costs, and any recovery action against the borrower.
When can the guarantor be released?
Your loan against 80% of your home's value as it grows.
Release around year 3.5
Release happens when your loan drops below 80% of your home's value. Property growth brings this forward; extra repayments also help.
Buying power uplift
A guarantor removes the LMI drag on your deposit and uses your full serviceability.
- Without guarantorLMI drag of $24,938 reduces effective buying power.
- $362,450
- With guarantorNo LMI.
- $387,388
- Extra buying power, roughly
- +$24,938
Assumes monthly repayment capped at 30% of gross monthly income. Lenders use HEM + full servicing calc; this is indicative only.
Rough estimate. See Borrowing Power for the full model.
Assumes a single guarantor and a limited guarantee capped at the part of the loan above 80% LVR. LMI premiums use indicative tiers; the actual premium depends on the lender, insurer and property. Data as of September 2026.
Keep going
Guarantor is one option. Compare it against the other paths to a deposit.
Guarantor loans explained
For illustration only. This tool does not constitute personal financial advice. Grant amounts, caps, and eligibility rules may change. Federal scheme caps shown are for capital city/regional centres and may differ for other areas. Always verify with your state revenue office and Housing Australia, and consider seeking independent financial advice before making decisions.