Guarantor Loan Calculator
See how much a family guarantee could reduce lenders mortgage insurance and the loan-to-value ratio on a home loan.
Your results
Calculation breakdown
- LVR without guarantee
- loan ÷ property value × 100
- Effective LVR with guarantee
- loan ÷ (property value + guarantee amount) × 100
Worked example
A $570,000 loan on a $600,000 property is 95% LVR alone, but a $60,000 family guarantee brings the effective LVR down to about 86.4%.
Assumptions
- This is an indicative loan-to-value calculation only; each lender sets its own guarantor policy and LMI thresholds.
- Guarantor arrangements carry real risk to the guarantor's property and require independent legal advice.
How this calculator works
This calculator compares a home loan's loan-to-value ratio with and without a guarantor's security contribution, showing whether the guarantee is likely to bring the loan below common lenders mortgage insurance thresholds.
Frequently asked questions
How does a guarantor loan work?
A family member offers equity in their own property as additional security, which can reduce the effective loan-to-value ratio for the bank and may help avoid lenders mortgage insurance.
Does the guarantor become responsible for the whole loan?
Typically the guarantee is limited to a specified amount rather than the whole loan, but the guarantor's property is at risk if repayments are missed, so independent legal advice is essential.
Does this calculator guarantee I will avoid LMI?
No, it only estimates the resulting loan-to-value ratio; each lender sets its own LMI thresholds and approval criteria.
Results are estimates only and are not financial, tax, legal or credit advice.