Guarantor Loan Calculator
Estimate the extra security needed for a guarantor home loan and compare a later release scenario.
Your purchase
Your security estimate
Example inputsCheck the highlighted fields to calculate your estimate.
- $125,000
- Indicative limited-guarantee allocation under this security model.
- $900,000
- $100,000
- $500,000
- $0
| Support allocated | $125,000 |
|---|---|
| Remaining support capacity | $375,000 |
| Guarantor equity after allocation | $575,000 |
| Borrower-only LVR | 90% |
| LVR with allocated support | 80% |
Compare a release scenario
| Loan reduction to target at today's value | $100,000 |
|---|---|
| Property value needed at today's loan | $1,125,000 |
| Later borrower-only LVR | 76.19% |
| Later additional security needed | $0 |
Calculating the Security Gap
A guarantor loan calculator estimates the additional security a purchase needs after the buyer's cash contribution. The borrower still owes the full loan.
The loan is the purchase value plus entered costs, less cash contributed, with a minimum of zero. The unsupported amount is the loan above the chosen borrower-only loan-to-value ratio (LVR).
This model treats the guarantee as extra security value. Divide the loan by the target LVR as a decimal, then subtract the borrower property's value. A negative result becomes zero. The extra security needed therefore differs from the unsupported loan amount.
Available guarantor support is the lower of the entered guarantee cap and security capacity after existing secured debts. The tool allocates support up to the amount needed and reports any shortfall.
A Limited Guarantee Example
The starting purchase is $1,000,000, with $20,000 in costs and $120,000 in cash, giving a $900,000 loan. At an 80% target, $100,000 of debt exceeds the borrower-only limit. Additional security of $125,000 brings the modelled ratio to 80%: $900,000 divided by $1,125,000.
Westpac's Family Security Guarantee example uses that loan, borrower value and additional security amount. Its page also describes a 50% guarantor-security cap. The calculator's separate 80% guarantor security limit is an editable assumption.
With the example guarantor property worth $1,000,000 and secured debts of $300,000, available support is $500,000. Allocating $125,000 leaves $375,000 of support capacity and $575,000 of equity after that allocation.
Change only the guarantor value to $500,000 and support falls to $100,000, leaving a $25,000 shortfall. Equity after allocating that support is $100,000. Remaining equity is an arithmetic estimate, not cash available to withdraw.
Releasing the Guarantee
A lower loan balance or higher borrower property value can reduce the additional security needed. The later-scenario fields let you enter both without predicting property growth or a release date.
At the starting settings, reducing the $900,000 loan to $800,000 reaches 80% against the $1,000,000 borrower property. Alternatively, a value of $1,125,000 reaches 80% with the loan unchanged. The later example uses an $800,000 balance and $1,050,000 value, showing 76.19% and zero additional security needed.
A zero result is a modelling threshold. Westpac considers release requests against its repayment and mortgage-insurance requirements. A lender must approve release and discharge the guarantee security.
What a Guarantor Must Consider
A guarantor's legal liability comes from the signed guarantee. This calculator models a limited security allocation and cannot set the amount legally recoverable.
CommBank's Guarantor Support allows security for the entire loan or a smaller amount. This differs from assuming every guarantee covers only a deposit shortfall.
Moneysmart's guarantor guidance explains that a guarantor can lose an asset used as security. A guarantee for the entire loan can expose the guarantor to the whole debt and interest.
Get independent legal advice before signing. Establish the agreed guarantee limit, any covered interest or costs and the conditions for release. The borrower must still afford repayments, and the lender assesses the application and both properties. Additional security does not pay the borrower's debt or guarantee approval.