Guarantor Home Loans for Healthcare Professionals: How to Buy Sooner and Avoid LMI
- Healthcare Home Loans
- 2 days ago
- 4 min read
If you’re a doctor, nurse, or allied health professional, your income and career stability put you in a strong position to own a home. But for many in healthcare, saving a 5, 10, or 20% deposit while renting or working long shifts can feel out of reach.
That’s where a guarantor home loan can help you buy a property sooner, often without paying Lenders Mortgage Insurance (LMI), saving you tens of thousands.
In this guide, we’ll explain:
What a guarantor home loan is
The benefits for healthcare workers
Key considerations for the guarantor
How this strategy can help you get into the property market sooner
What is a Guarantor Home Loan?
A guarantor home loan allows a family member, usually a parent, to use part of the equity in their own property as additional security for your loan.
Instead of needing to save a 20% deposit, your guarantor’s property covers the shortfall.
This means:
You can borrow up to 100% of the purchase price (plus costs with some lenders)
You can avoid LMI (a cost that can be $10,000–$50,000)
You can buy your home much sooner
Benefits for Healthcare Professionals
Get into the market faster
Even with a small deposit, your stable healthcare income plus a guarantor’s support can make lenders confident to approve your loan.
Avoid costly LMI
Many lenders waive LMI for certain healthcare roles at 90–95% LVR, but a guarantor loan can remove the need for LMI entirely, even if your role isn’t on the eligible list.
Leverage stable income and career
Healthcare professionals are considered low-risk borrowers, which often means better rates and borrowing terms.
No out-of-pocket cost to the guarantor (if repayments are met)
The guarantor isn’t giving you money, they’re providing equity as security.
What it Means for the Guarantor
For the guarantor, this is a serious commitment. They are agreeing to cover part (or all) of the loan if you can’t repay it and the property sale doesn’t cover the balance.
Guarantor responsibilities:
Their property is used as additional security
They don’t make your repayments - you do
They can limit the guarantee to a fixed amount (e.g. the LMI amount)
Once your loan reaches 80% of the property’s value, the guarantee can be removed
Guarantor Rules: What Lenders Require
If you’re considering this strategy, it’s important to know what most Australian lenders expect from a guarantor:
They don’t need to own their property outright – A mortgage is fine, as long as there’s enough usable equity to cover the guarantee.
They must own property in Australia – Most lenders require the guarantor to be an Australian citizen or permanent resident with property in Australia. Overseas-based guarantors are rarely accepted.
They must have a strong financial position – This includes a good credit history, manageable debts, and stable income.
They must be closely related – Usually an immediate family member such as a parent. Some lenders accept siblings or grandparents, but rarely friends or extended relatives.
They must receive independent advice – Most lenders require guarantors to get independent legal (and sometimes financial) advice before signing.
They can offer a limited guarantee – Often just enough to avoid LMI, rather than securing the full loan.
This means your guarantor doesn’t have to be debt-free, they just need the right amount of equity, the right relationship to you, and the ability to meet the lender’s requirements.
High-Value Property Limits
While a guarantor loan can remove the need for LMI regardless of your role, lenders may still apply maximum loan or property value caps. For example, some lenders set limits of $1.5M–$2M in metro areas and lower caps in regional locations. This means you can still avoid LMI on properties over $1 million, but the guarantor arrangement must fit within the lender’s policy and security requirements.
Important Considerations
Responsibility to Protect the Guarantor’s Property – By keeping up with your repayments, you ensure your guarantor’s property remains unaffected.
Temporary Impact on the Guarantor’s Borrowing Power – The guarantee is only in place until your loan reaches 80% of the property value, after which it can be released.
The Value of Clear Communication – Open discussions about expectations help keep family relationships strong.
Motivation to Stay on Track – Knowing a loved one has backed you can be a powerful incentive to stay disciplined with your finances.
Why This Strategy Works for Healthcare Professionals
Job security: Healthcare is one of Australia’s most stable industries
Special lending policies: Lenders often have favourable criteria for healthcare professionals
High earning potential: Makes it easier to pay down your loan and release the guarantor sooner
Frequently Asked Questions About Guarantor Home Loans
1. Can any healthcare worker get a guarantor loan?
Yes. While LMI waivers may only apply to healthcare roles like doctors, Nurses, allied health and dentists, guarantor loans are available to any eligible borrower, including non-clinical staff.
2. Does a guarantor loan cost more?
No. In fact, it can cost less because you may avoid paying LMI and enter the market sooner. The guarantor isn’t giving you cash, they’re offering property equity as additional security.
3. How long does the guarantor have to stay on the loan?
Usually until your loan is 80% or less of your property’s value. Once that point is reached (through repayments and/or property value growth), the guarantor can be removed.
4. What happens if I miss repayments?
If you default and the property is sold for less than the loan amount, the guarantor is responsible for covering the guaranteed shortfall. This is why it’s important to have a repayment plan and emergency savings.
5. Can the guarantee be limited?
Yes. The guarantor can limit their guarantee to a specific amount, often just enough to avoid LMI; rather than the full loan balance.
Bottom line: For healthcare professionals eager to buy a home sooner, a guarantor home loan can be a powerful tool. It removes the deposit hurdle, avoids unnecessary costs, and leverages the stability of your career, all while giving you a clear path to owning your own home without delay.
Need expert advice? Healthcare Home Loans can help you structure your guarantor loan to protect your guarantor, minimise risk, and get the best possible terms.