Who can act as a guarantor for my first home loan in Australia?

There’s no single legal test for who can be a guarantor, and no government rule that sets it — eligibility is a matter of each lender’s own credit policy, and those policies differ from one institution to the next. What stays constant is the substance of the role: a guarantor offers part of their own property as extra security for someone else’s home loan, and in doing so takes on a real, legally binding liability if the borrower can’t keep up the repayments. Because a lender is being asked to rely on another person’s asset and financial position, it inevitably applies its own criteria — relationship to the borrower, age, equity and financial position, and the extent of the guarantee — before accepting anyone into that role, and those criteria are set by each lender individually, not by a published industry standard.

What is a guarantor home loan?

A guarantor home loan is one where part of the borrowing is secured not only against the property being bought, but also against equity in a separate property owned by someone else — the guarantor. It isn’t a loan to the guarantor, and the guarantor doesn’t gain any ownership of the home being purchased; it’s a form of additional security that sits alongside the borrower’s own contribution. See our guide to how guarantor home loans work for the mechanics in full.

Why does the guarantor’s identity matter to a lender?

Two things are doing the work here, and both point to why lenders are selective about who they’ll accept. First, lenders mortgage insurance (LMI) is usually payable once the amount borrowed passes 80% of the property’s value — as at July 2026, that threshold hasn’t changed — and a guarantor’s additional security is one of the ways a loan can proceed above that level without LMI, because the guarantor’s equity effectively fills the gap the lender would otherwise price for. Second, credit licensees are required to make reasonable inquiries into a borrower’s situation and take reasonable steps to verify it, and what counts as “reasonable” scales to the product and the parties involved. A guarantee changes who else the lender is relying on, which is part of why a lender’s guarantor criteria won’t look the same from one institution to the next, and why no single published standard covers all of them.

What eligibility criteria do lenders commonly look at?

Category	What it generally covers
Relationship to the borrower	Some lenders limit who can act as guarantor by relationship; how narrowly or broadly that’s drawn is set by each lender.
Age	Lenders may apply age-related considerations to a guarantor’s application; the specifics are set by each lender.
The guarantor’s own equity and finances	Lenders review whether the guarantor has enough unencumbered equity and check their income and expenses, broadly similar in spirit to how any credit applicant is assessed.
Type and extent of the guarantee	Some guarantees are capped to a set dollar amount or a portion of the loan; others aren’t structured that way.
Independent advice	Most lenders expect the guarantor to get their own legal advice — separate from the borrower’s — before the guarantee is signed. The exact form this takes differs by lender.

Because these settings change between lenders and over time, the only reliable way to find out whether a specific person qualifies is to check the current policy of the specific lender being considered — not a general guide like this one.

What should someone weigh up before agreeing to be a guarantor?

Being a guarantor is not a formality. If the borrower stops making repayments, the lender can call on the guarantee, which can mean the secured portion of the guarantor’s own property is at risk — potentially forcing the sale of an asset they never intended to sell. While the guarantee is in place, it may also affect the guarantor’s own capacity to borrow elsewhere, since it’s a liability a lender will typically factor into any of their own future loan applications. Family relationships add a layer most credit assessments don’t have to account for: agreeing to guarantee a loan for a son, daughter or other relative is a financial decision made inside a personal one, and the two aren’t easy to separate cleanly.

None of this is a reason to rule guaranteeing in or out — it’s a reason for the guarantor to get their own independent legal and financial advice, separate from any advice the borrower is getting, before agreeing to anything. Their interests in the transaction aren’t the same as the borrower’s, and a lender’s paperwork won’t tell them what the arrangement means for their own situation.

So, who can be a guarantor?

There isn’t a single answer this article — or any general guide — can give, because the answer sits inside each lender’s own credit policy and changes over time. What can be said generally is that a guarantor takes on real liability by offering their property as extra security, that lenders apply their own eligibility criteria to manage that risk, and that anyone considering it should get independent legal and financial advice before deciding. A mortgage broker can help map which lenders’ policies might apply to a particular family’s circumstances; whether someone should become a guarantor is a decision for that person and their own advisers, not for this article.

If it’s a parent’s property equity being discussed specifically, our guide to using a parent’s equity as a home deposit covers how that kind of arrangement works and what it puts at risk. And for the range of ways first home buyers approach a deposit more broadly, see our guide to how much deposit you need for a first home.