What does going guarantor mean?

As a guarantor you promise to repay someone else's loan if they cannot. If they default, the lender can pursue you for the guaranteed amount, including missed repayments, and may be able to claim against your assets, sometimes your own home.

How much am I liable for as a guarantor?

It depends on whether your guarantee is limited to a set amount or unlimited (the whole loan plus costs). A limited guarantee caps your exposure; an unlimited one does not. Always check the wording and get independent legal advice before signing.

Can I be released as a guarantor?

Sometimes, once the borrower has enough equity or income to stand alone, but it is not automatic and the lender must agree. Treat a guarantee as a long-term commitment, not a quick favour.

Guarantor Loan Calculator

This New Zealand calculator shows your potential exposure as a guarantor on someone else's loan or mortgage. If the borrower cannot pay, the lender can pursue you for the guaranteed amount, sometimes the whole loan plus costs, and possibly against your own home. You enter the loan, the rate and your guarantee limit, and the tool shows the amount you could be liable for and the repayment you might have to cover.

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Loan you are guaranteeing

Interest rate

Term (years)

Your guarantee limit (0 = unlimited)

amount you could be liable for

Repayment you may cover$0

Guarantee type-

A limited guarantee caps your exposure at the limit; an unlimited guarantee can cover the whole loan plus interest and costs. This is a simplified illustration; always get independent legal advice before going guarantor. Estimate only.

How it works

The calculator shows the loan you are guaranteeing and the monthly repayment a lender could ask you to cover if the borrower defaults. If you set a guarantee limit, your exposure is capped at that amount; with no limit (unlimited), you could be liable for the whole loan plus interest and the lender's costs. The point is to see the real size of the commitment before you sign.

Worked example

Guaranteeing a $150,000 loan at 6.5% over 25 years, the repayment you might have to cover is about $1,013 a month. With no limit, your exposure is the full $150,000 plus costs; a $50,000 limited guarantee would cap it at $50,000.

Related calculators

Mortgage Deposit Gift Calculator: gifting a deposit.
Mortgage Repayment Calculator: repayments.
Borrowing Capacity Calculator: borrowing power.
Home Equity Calculator: your equity.

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