Ideally you should aim to remove the guarantee as soon as possible so that you do not unnecessarily put your guarantor at risk. Once the guarantee is removed, the lender will just rely on your property as security for the loan. So how soon can you remove the guarantee? What are the conditions that you will have to meet to have it removed?

How long does the guarantee last?

The guarantee will continue until you request that your lender remove the guarantee. You should expect the guarantee to be in place for roughly five years before you are in a position to remove it. This can vary significantly depending on your circumstances and how quickly you pay off the loan.

What are the conditions you have to meet?

You can only remove the guarantee once you have satisfied these general requirements:

• Your repayments must have been made on time, every time, for the last 6 months.
• Your loan must be for less than 90% of the value of your property. This can be from a combination of extra repayments and capital growth in the value of your property.
• Your credit history, income, employment and all other aspects of your situation must meet the lenders policy.

Ideally your loan should be for less than 80% of the value of your property at the time you remove the guarantee as then you will not pay any Lenders Mortgage Insurance (LMI). Please enquire online or discuss with your lender for specific guidelines as they may vary slightly from those listed above.

How can you remove the guarantee?

With most lenders the process is quite simple. You can call them and ask them to revalue your home. A valuer will come out to inspect your property and should your estimated market value be confirmed then the lender will happily remove the guarantee. There may be some minor administration fees and government fees payable at this time, which rarely total more than $350.