How Parents Can Help: Guarantor and Family Boost Options in NZ
For many first-home buyers in New Zealand, saving a deposit is the biggest hurdle to getting on the property ladder. With rising rents and living costs, it’s no surprise that more families are exploring ways to support their adult children into their first home.
The good news? In 2025, there are several safe and structured ways parents can help — without having to gift large sums of money or drain their retirement savings. The two most common options are acting as a guarantor or providing family boost support. Here’s how each one works.
What Is a Guarantor Home Loan in NZ?
A guarantor home loan allows parents to use the equity in their own property to help increase the deposit for the first-home buyer. Instead of giving cash, the parents effectively “guarantee” a portion of the loan.
✔ How It Works
The lender uses part of the parents’ home equity as additional security.
This boosts the borrower’s deposit — sometimes to the full 20% required.
The first-home buyer can often avoid higher interest rates and low-equity fees.
✔ Why It Helps
A guarantor arrangement:
Reduces the risk for the lender
Allows first-home buyers to get into the market sooner
Helps access better mortgage rates and terms
Can potentially save thousands in fees
✔ What Parents Need to Know
Being a guarantor is a big commitment. If the borrower defaults, the bank may call on the guarantor to cover the guaranteed portion of the loan. That’s why it’s essential for both parties to get legal advice and ensure the arrangement is structured safely.
What Is a Family Boost or Family Deposit Gift?
Some parents prefer to provide help without being legally tied to the mortgage. In these cases, a Family Boost or deposit gift may be the better option.
✔ How a Family Boost Works
Parents gift or loan money to help with the deposit.
Lenders usually require a “gifting declaration” to confirm the money doesn’t need to be repaid.
If the contribution is a loan rather than a gift, the lender will assess the loan repayments as part of the borrower’s budget.
✔ Why Families Choose This
Simpler than being a guarantor
No legal liability for the mortgage
Allows parents to help without putting their own home at risk
This option is especially popular for parents who have savings available but don’t want long-term obligations.
Which Option Is Right for Your Family?
It depends on your financial situation, the deposit gap, and how comfortable parents are with risk.
Choose a guarantor structure if:
Parents have strong equity
You need a large deposit boost
You want better interest rates and avoid low-equity margins
Choose a family boost or gift if:
Parents have cash available
Everyone prefers a cleaner, simpler arrangement
You need only a small top-up for your deposit
Final Thoughts
Parental support can make a huge difference — often shaving years off the deposit-saving journey. But these arrangements should always be structured carefully and with professional advice.
A mortgage adviser can review your deposit, your parents’ equity, and lender policy to help your family choose the safest, smartest path into your first home.