Understanding Guarantor Home Loans: A Guide for Healthcare Professionals
- Healthcare Home Loans
- Aug 18, 2025
- 4 min read
Updated: Dec 17, 2025
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. However, many in healthcare find it challenging to save a 5%, 10%, or even 20% deposit while managing rental costs and long shifts.
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 range from $10,000 to $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, combined with a guarantor’s support, can instill confidence in lenders. This can lead to quicker loan approvals.
Avoid Costly LMI
Many lenders waive LMI for certain healthcare roles at 90–95% LVR. However, a guarantor loan can eliminate the need for LMI entirely, even if your role isn’t on the eligible list.
Leverage Stable Income and Career
Healthcare professionals are often viewed as low-risk borrowers. This perception can lead to better rates and borrowing terms.
No Out-of-Pocket Cost to the Guarantor
The guarantor isn’t giving you cash; they’re providing equity as security. As long as you meet your repayment obligations, they won’t incur costs.
What it Means for the Guarantor
For the guarantor, this is a serious commitment. They agree to cover part (or all) of the loan if you cannot 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 acceptable, 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 that, 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: This 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. This strategy provides 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.
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