The Property Couch TPC Gold | Using Parental Guarantees to Buy a Home
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Aug 19, 2025 Entering the property market can be daunting for first-time buyers, but parental guarantees offer a unique solution. The podcast discusses how parents can assist without directly giving cash, using their home equity instead. It explores financial mechanics and the potential savings on lenders mortgage insurance. Valuable insights from a mortgage broker highlight the strategic considerations for parents and children alike, emphasizing the importance of clear communication for a successful home-buying experience.
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Tom's Parental Guarantee Question
- Tom is buying a $550,000 home with a 15% deposit and plans to use a parental guarantee to fund renovations.
- His broker said interest-only wasn't possible with a guarantee, prompting clarification from Ben.
Confirm Lender Policy On Interest-Only
- Check lender policy before assuming interest-only is disallowed with a parental guarantee.
- Some lenders permit interest-only splits so shop around with your broker.
Limited Guarantees Cap Parental Exposure
- A parental guarantee is typically limited to around 25% of property value and complements the standard 80% lending.
- Limited guarantees protect parents by capping their exposure to that specific amount rather than the whole loan.