Family Guarantee Home Loans

The Family Guarantee is a flexible home loan solution which enables first home buyers and first-time property investors with limited savings to enter the property market sooner.

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21 Sept 2026

| Home Loan

A Family Guarantee can help homebuyers enter the property market sooner.

The Family Guarantee is a flexible home loan option which allows first home buyers and first-time property investors with limited savings to enter the property market sooner.

By using the equity (Equity is the difference between your home’s market value and what you still owe on your loan) in a family member’s property (e.g. parents) or securing a portion of the debt with a Term Deposit fund, you may be able to enter the property market sooner and with greater confidence.

If a Family Guarantee isn't an option, you may be eligible for the Australian Government’s 5% Deposit Scheme.

Key benefits for first-time borrowers

A Family Guarantee allows borrowers:

to qualify for a loan to get into the property market sooner;
to avoid paying Lenders’ Mortgage Insurance (LMI), which is typically required where the value of the loan exceeds 80% of the value of the property to be purchased; and/or
to increase the amount that can be borrowed – up to 100% of the value of the property. However, borrowers must provide at least 5% of the purchase price from genuine savings for other fees and charges.

Key features for guarantors

Limited guarantee

The amount of the guarantee is limited to the amount required to achieve a Loan to Value Ratio (LVR) of 80%. The LVR is calculated by dividing the total loan amount by the total security amount (the value of the property to be purchased) to be provided expressed as a percentage.

Releasing the guarantee

A family guarantee can be released once the loan is at or below 80% LVR against the property you have purchased, or earlier if adequate substitute security (e.g. LMI or replacement security) is provided. An application must be made for release, as this is not automatic.

Loan repayments

If you’re unable to make your repayments, your guarantor will be liable for the portion of the loan guaranteed.

Here's how it works

Mia and Dan are First Home Buyers saving towards the goal of purchasing a property in Edwardstown for $500,000.

1. Mia and Dan have $30,000 in savings which will be enough to cover Government charges and other fees^*.

2. Mia and Dan want to purchase a property valued at $500,000 and borrow the full amount. To avoid Lenders Mortgage Insurance the loan must represent not exceed 80% of the property value.

$500,000/.80 = $625,000 means an additional security of $125,000 is needed for the loan. This is achieved through their property value and a limited guarantee from Dan’s parents as secured by their asset(s).

3. Dan’s parents agree to provide a limited guarantee of $125,000 to bring the loan to an 80% LVR and avoid LMI. 

Dan’s parents must have at least $125,000 of equity in their home to support the guarantee.

4. Mia and Dan avoid paying LMI, saving them approximately $16,000^~– that’s a significant saving.

5. Credit Union SA can now fund a loan of $500,000 without LMI payable.

6. Over time, Mia and Dan’s property has increased in value to $575,000. At the same time, they’ve reduced their loan to $460,000 through regular repayments, which brings their loan-to-value ratio (LVR) down to 80%.

This means they no longer need Dan’s parents as guarantors. As a result, the guarantee can be removed and their parents’ property is released as security.

Understanding the risks

To ensure everyone understands all the ins and outs, most lenders will ask all borrowers and guarantors to be interviewed. Guarantors will be interviewed separately from the borrowers. We strongly recommend that guarantors seek independent legal advice before signing the guarantee.

We give all guarantors prominent notice that:

you can refuse to enter into the guarantee
you have the right to limit your liability
there are financial risks involved
you should consider the information and documents we provide to you, and seek further information or clarification if required
you should seek independent legal and financial advice before entering into the guarantee.

Know the risks of being a guarantor

Becoming a guarantor is a significant commitment and should only be considered once you are comfortable with both the borrower’s financial position and your own. You should take into account your current circumstances as well as how your finances may change in the future.
As a guarantor, you are legally responsible for the portion of the loan you guarantee. This means that if the borrower is unable to meet their loan repayments and defaults, Credit Union SA may require you to repay the guaranteed amount. Where a term deposit is provided as security, some or all of that deposit may be used to meet the borrower’s shortfall. Where property equity is used as security and you are unable to repay the amount when requested, the secured property may need to be sold to recover the debt.
Acting as a guarantor may also affect your capacity to obtain credit in your own name while the guarantee remains in place.

You can read more about guarantees in our Guarantee Information Statement

^*Fees are subject to change and amounts required may vary. Check out this link for the latest South Australian fees and charges.
^~LMI costs are subject to change.

Available home loans

Here's a list of our homes loans available to family guarantee applications:

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FREQUENTLY ASKED QUESTIONS

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What is a family guarantee, and when should I use it?

Struggling to save up enough of a deposit to buy your first home or first investment property? Then our Family Guarantee could be just the thing to get you into a place you can call your own. Our Family Guarantee enables first home buyers with limited savings to enter the property market sooner*.

Here's how it works – If your parents or other family members have equity in their home, investment property or have a Term Deposit with Credit Union SA, you can use that equity or investment to guarantee a portion of your loan.

Which family members can provide a Family Guarantee?

Parents
Parents-in-law
Step-parents

Credit Union SA will consider the provision of guarantees by other immediate family members where a guarantee from the above-mentioned family members would not be appropriate.

When can a Family Guarantee be used?

Guarantees from family members can only be provided to assist first home buyers/investors to:

purchase a new property;
purchase an established property;
build a new home.

Where a borrower is entitled to a government grant, the entitlement will not be affected by the provision of a Family Guarantee. Family Guarantees will not usually be accepted by the Credit Union where offered to support borrowings for a second/subsequent property or for any other purpose.

To find out more about leveraging the equity in Mum and Dad's home so you can get into yours, have an obligation-free chat with one of our experienced staff, Mobile Managers or download our guide.

Download our Family Guarantee Guide

*Subject to responsible lending criteria.

INFORMATION YOU SHOULD KNOW

This is general advice only and you should consider the terms and conditions before determining whether any of our products are suitable to your situation. Other fees and charges may apply.

The target market for this product can be found within the product’s Target Market Determination (TMD), available at creditunionsa.com.au/legal/terms-and-conditions/target-market-determination.

This article is intended as general information only and has been prepared without taking into account the personal financial situation, objectives or needs of the reader. Before acting on this information, you should consider its appropriateness, having regard to your objectives, financial situation and needs. You should always seek professional advice or assistance before making any financial decisions.