Parents can help their children buy a home by offering a family guarantee: the equity in the parents' home is used as extra security for the child's loan, usually covering the 20% deposit. The child can then often buy with little or no deposit of their own and avoid lenders mortgage insurance, but they still borrow and repay the full loan.

In this video, McKern mortgage broker Mark Jones walks through a worked example: parents with a $1 million home and a $300,000 mortgage could access up to about $500,000 in equity (lenders generally go to 80% of the value), and a $100,000 guarantee could secure a child's $500,000 purchase. He explains the risks for parents, and how the guarantee can usually be released after five to ten years once the loan is paid down or the property is revalued.

In this video

0:00 Why more parents are helping

0:41 Who repays the loan

1:36 Formal vs informal agreements

2:49 Worked example: how much equity is available

General information only, not personal advice.