A little help from family

By Steven Cross 30 November 1999 | 1 minute read

The property market is a tough nut to crack for today’s first home buyers, but with a little family backing homeownership may be more affordable than you realise.


Soaring rents and the rising cost of living have made it tough for would-be buyers to save a deposit.

While plenty of young people can afford to service a mortgage, they sometimes struggle to stump up the deposit that most banks require. However with support from your family you might be able realise homeownership sooner.

By going guarantor your parents can help you make a start in the property market by unlocking the equity in their home and using it as collateral. The process is easy to arrange as well.

Being a guarantor does come with certain responsibilities however, so it’s important that your parents understand what it means.

If your parents choose to go guarantor, the lender will hold them responsible for repayments should they go unpaid. It is therefore essential that they look closely at their ability to meet their financial commitments and be confident that they fully understand where their responsibilities lie.

In addition, it is worthwhile noting that they may only have to act as guarantor for the first few years of your mortgage. As you pay down your loan, or the value of your property increases, they may be able to withdraw their support – leaving you standing on your own two feet.

A good start in life can make all the difference further down the line and the earlier you break into the property market the sooner you can look forward to owning your own home. With the right approach and understanding your parents can help your homeownership dreams become a reality.


• Under what circumstances would you have to assume responsibility for loan repayments?

• How much of the loan will you be responsible for?

• How long will you have to act as the guarantor for the loan?

• Does the loan have an acceleration clause and would you be responsible for the total amount if the lender required the loan to be repaid in full immediately?

A little help from family
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