Guarantor

A person (often a family member) who agrees to be responsible for loan repayments if the borrower is unable to meet them, sometimes using their own property as additional security.

In More Detail

Guarantor arrangements are sometimes used to help reduce or avoid lenders mortgage insurance, or to bridge a shortfall in deposit or serviceability. This is a significant commitment for the guarantor and worth carefully understanding before proceeding.

When to Seek Help

If a guarantor arrangement is being considered, both the borrower and the potential guarantor should understand the obligations involved — a broker or solicitor can explain the structure in detail.