A serviceability guarantee is a type of guarantee where the guarantor is pledging to use their surplus income to help the borrower to make their repayments. Typically it is used when the borrower is a student or is working irregular hours and their parents are willing to help them to buy a property and make the repayments.

It is quite common for family members to help each other out with their commitments and with financial burdens. This loan can formalise this arrangement and make it acceptable to a lender. The guarantor will need to sign a form confirming that they are aware that the borrower cannot meet the loan repayments on their own and that they will be required to make repayments.

This type of guarantee will only be accepted by lenders if you are borrowing 80% or less of the property value. If you are borrowing more than 80% then you should consider using a security & serviceability guarantee.