💡 How a Family Guarantee is Helping This Newly Blended Family Buy Their First Home — With No Deposit
At Best Foot Forward Mortgage Solutions, we love finding pathways to homeownership for everyday Australians — especially when life hasn’t gone exactly as planned. One of our recent client scenarios beautifully demonstrates how family support, strategic advice, and a well-structured loan can overcome significant hurdles, such as divorce, a lack of deposit, and ineligibility for first-home buyer guarantee schemes.
👩❤️👨 Meet Our Clients: A New Chapter, A New Home
Our clients are a recently blended couple, both of whom were previously divorced, with two young children between them. Like many Aussies rebuilding after major life transitions, they were in an intense financial position day-to-day, but didn’t have a 5% deposit saved.
Here’s a quick snapshot:
Female Client Income: $58,000
Male Client Income: $148,000
Combined Income: $206,000
Children: 2
Deposit Available: $0
Due to their higher combined income, they didn’t qualify for the First Home Buyer Guarantee Scheme (income caps are changing on the 1st January 2025). However, the couple was worried about the property market moving too quickly, and they would not have a big enough deposit saved in time. So the female client’s mum stepped in with an incredible gift — the equity in her wholly owned home.
What a show of love and support. 💝
🏡 The Power of a Family Guarantee
A Family Guarantee Loan allows a close relative to use equity in their own property to help secure the borrower’s loan — without giving cash, becoming a co-owner, or needing to contribute to repayments.
Here’s what it meant for this couple:
No deposit required
Borrowing capacity increased
Avoided Lenders Mortgage Insurance (LMI) — potentially saving $25,000+
Better interest rates thanks to the 80% LVR treatment
Able to borrow up to 105% of the purchase price (to cover purchase + costs)
🔢 Let’s Break It Down — The Numbers
After a full review of their living expenses, dependent costs, and liabilities, here’s what we found:
✅ Borrowing Capacity Estimates:
Three separate lenders;
$830,000 with an interest rate of 5.74%
$844,000 with an interest rate of 5.64%
$825,000 with an interest rate of 5.99%
These figures are preliminary — we still need payslips and supporting docs to finalise — but it’s clear they’re well within serviceability limits. That’s a massive win.
🔍 Lender Options Compared
Here’s a summary of what I’ve already researched regarding your mum acting as guarantor:
Lender 1 – Family Security Guarantee
Use equity in a parent’s property (must not be co-owned with you)
Covers up to 100% + costs of purchase
Guarantee limited to 50% of the guarantor’s property value
No income test for guarantor
Must obtain independent legal advice
Treated as an 80% LVR application = no LMI + better rates
Lender 2 – Family Pledge Loan
Works almost identically to Westpac
Reduces or eliminates LMI
Helps boost borrowing power
Also available for investment purchases
Lender 3 – Family Guarantee Loan
Structures the loan as two parts (secured and unsecured)
Designed with first home buyers in mind
Leverages the guarantor’s equity to support the full purchase
Avoids LMI
⚖️ Important Note:
📝 All lenders require the guarantor to obtain independent legal advice before the loan can be approved. This ensures they fully understand their responsibilities, the risks involved, and the structure of the guarantee. It’s a crucial step to protect both the guarantor and the borrower.
💬 What This Means for You
With mum stepping in as guarantor, you're now in a position to:
Enter the property market now, rather than saving for years
Avoid the dead money of rent
Provide stability for your children
Enjoy the financial benefit of homeownership sooner
This is more than just a home loan — it’s a fresh start backed by family support and smart advice. What a beautiful gift from your mum. 💐
📞 Next Steps
If you’re in a similar position, I’d love to help you understand your options. Whether it’s a Family Guarantee, first home scheme, a tailored refinancing strategy, construction loan, or a deposit bond, or bridging finance, we’ll break it all down in plain English and guide you step by step.
Ready to explore what’s possible for your family?
👉 Step 1- Let’s have a 15-minute Chat and get you started.
👉 Step 2- Book a Discovery Video Call.
👉 Step 3 - We will start an application for a pre-approval for a loan for you.
At Best Foot Forward Mortgage Solutions, we’ll help you move toward your property dreams — even if your starting point feels a little complicated.
#FastPreApproval #ConstructionLoan #MortgageBroker #BestFootForward #HomeBuild #FinanceDoneRight #FamilyGuaranteeLoans
The information contained is general information only and does not consider your objectives, financial situation and needs. Please talk to us if you need a fast-tracked home loan, and we can help you find a lender that has the processes in place to process the application quickly. We strongly recommend that you do not act on any information provided on this website without individual advice from your trusted advisor. You should also obtain a copy of and consider the Product Disclosure Statement for all financial products before making any decision.
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