Family Guarantee Loans in Perth: Your 2026 Guide
Perth's property market offers genuine opportunities for first home buyers who have family willing to help with their deposit. Whether you're looking in Baldivis- Ellenbrook or Aveley, a family guarantee can reduce your deposit requirement to as little as 5% while avoiding lenders mortgage insurance entirely.
Family guarantee loans work by using a parent's property as additional security, which means you can buy sooner without needing a 20% deposit or paying LMI. The arrangement protects both generations - you get into the market faster, and your parents' exposure is limited to a specific dollar amount, not their entire property.
Launch Finance helps families across Perth structure first home loans using family guarantees that work for everyone involved, completely free of charge.
Here's how family guarantee loans work in practice, what lenders look for, and how to protect both you and your parents in the process.
Key takeaways
- A family guarantee lets you buy with a 5% deposit and no LMI.
- Your parents' liability is capped at a set dollar amount, not their whole property.
- The guarantee can typically be removed once you reach 75-80% LVR.
How does a family guarantee work for first home buyers?
A family guarantee works by having your parents use their property as additional security for your home loan, letting you borrow up to 105% of your purchase price without paying lenders mortgage insurance. Your parents don't hand over cash or take on monthly repayments - they guarantee a portion of your loan using their property equity, and their liability is typically limited to 20-25% of your purchase price. Once you've built enough equity in your own property, you can remove your parents from the loan entirely.
The exact structure depends on your purchase price, your parents' equity position, and which lender you choose - which is what we work through with you in a free consultation.
What government schemes can work alongside a family guarantee?
Schemes available to family guarantee borrowers in Perth:
- › WA First Home Owner Grant:$10,000 for new builds under $800,000 in Perth (price cap increased from $750,000 in the 2026-27 WA Budget, applying to eligible transactions from 7 May 2026) - can be used toward your deposit alongside the guarantee.
- › WA Transfer Duty Exemption: no transfer duty on properties up to $600,000 (increased from $500,000), sliding concession to $800,000 in Perth metro (thresholds lifted in the 2026-27 WA Budget, applying from 7 May 2026).
- › Off-the-plan Stamp Duty Concession: 100% exemption up to $800,000 for pre-construction contracts, with the scheme extended to 30 June 2028 and expanded to cover survey-strata and community-title buildings from 12 March 2026.
- › First Home Guarantee (5% Deposit Scheme): note that family guarantee loans cannot be combined with the federal 5% Deposit Scheme - you choose one or the other.
Source: WA Government (RevenueWA)
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How do mortgage brokers structure family guarantee loans in Perth?
Step 1: Talk to us
Get in touch and we'll assess whether a family guarantee suits your situation and what options are available across our wide panel of lenders.
Step 2: Review your parents' equity position
We calculate how much equity your parents have available and determine the optimal guarantee amount based on your purchase price and deposit.
Step 3: Compare lender policies
We compare family guarantee products across our wide panel - policies vary significantly between lenders on guarantee limits, income assessment, and exit strategies.
Step 4: Structure the guarantee documents
We coordinate with your solicitor to ensure the guarantee is limited to a specific dollar amount and includes clear exit provisions for your parents.
Step 5: Submit your application
We handle the application process with your chosen lender, including all guarantee documentation and both your income assessment and your parents' equity verification.
Step 6: Settlement and ongoing management
We help you plan your exit strategy from day one, so your parents know exactly when and how they'll be removed from the guarantee.
What mistakes do families make with guarantee loans?
The biggest mistake families make is not setting clear expectations upfront. Your parents need to understand their maximum exposure, the exit timeline, and what happens if property values fall. Without these conversations, family guarantee loans can create stress rather than solve problems.
The second common mistake is choosing the wrong lender. Some lenders allow you to remove the guarantee once you reach 80% loan-to-value ratio, others require 75%. Some cap the guarantee at 20% of purchase price, others allow higher amounts. Getting the structure wrong can cost you tens of thousands in unnecessary LMI or delay your parents' exit by years.
Should you use a family guarantee or save a larger deposit?
A family guarantee makes sense when waiting to save a larger deposit costs more than the loan structure. In Harrisdale, where houses are in the $750,000-$900,000 band and seeing consistent growth, the opportunity cost of waiting 2-3 years to save a 20% deposit often outweighs the complexity of a guarantee.
The key consideration is your parents' comfort level and your own income stability. Family guarantees work best when you have strong income and career prospects, so you can build equity quickly and exit the arrangement within 2-5 years. They're less suitable when your income is variable or you're not confident about rapid equity building.
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Local experts
Free service
Prefer to talk now? Call 08 9367 4222 |
Frequently Asked Questions
How much can my parents guarantee on a family guarantee loan?
Typically 20-25% of your purchase price, though this varies by lender. Your parents' liability is limited to this dollar amount, not their entire property value.
Do my parents make repayments on the family guarantee?
No - you make all repayments. Your parents are only liable if you default, and only up to the guaranteed amount.
Can I remove my parents from the family guarantee later?
Yes - most lenders allow guarantee removal once you reach 75-80% loan-to-value ratio through repayments and capital growth. This typically takes 2-5 years depending on your repayment rate and market conditions.
What happens to the family guarantee if property values fall?
Your parents remain liable for the guaranteed amount regardless of property values. This is why it's crucial to structure the guarantee conservatively and have clear exit planning from the start.
Can my parents guarantee loans for multiple children?
Most lenders limit guarantees to one property per guarantor. If you have siblings who also want help, your parents typically can't guarantee multiple loans simultaneously.
Should I use a family guarantee or go to my bank directly?
A mortgage broker, every time. Family guarantee policies vary dramatically between lenders - some offer better exit conditions, others have lower guarantee requirements. Getting the structure wrong can cost your family thousands in unnecessary costs or delays.
Can a family guarantee be combined with the WA First Home Owner Grant?
Yes - the $10,000 WA FHOG (for eligible new builds under $800,000) can be used alongside a family guarantee. Note that a family guarantee cannot be combined with the federal 5% Deposit Scheme - you choose one or the other.
Your Next Steps
Getting a family guarantee right protects both you and your parents for years to come. The structure you choose affects your exit timeline, your parents' exposure, and your overall borrowing costs - which is exactly what a broker comparison is designed to optimise.
Ready to find out if a family guarantee works for your situation? Contact the Launch Finance team for a free consultation or call 08 9367 4222. We'll assess your family's position across our wide panel of lenders and structure the guarantee to protect everyone involved.
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Launch Finance · General information only - this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions.
