Guarantor Risk Exposure Calculator

This calculator estimates your potential exposure as a guarantor on a loan in New Zealand, the amount you could be asked to pay if the borrower you are guaranteeing cannot. Going guarantor, most often a parent helping a child into a first home, is an act of generosity, but it is also a serious financial commitment that people sign up to without fully grasping the downside. If the borrower defaults, the lender can sell the security, and if the sale raises less than the loan balance, the shortfall lands on the guarantor. A limited guarantee caps your liability at an agreed dollar amount, so your exposure can never exceed it, while an unlimited guarantee leaves you on the hook for the whole debt. You enter the borrower's loan balance, the forced-sale value the security might realistically achieve, your guarantee type, and your cap if it is limited, and the calculator works out the shortfall on default and your exposure, which is the shortfall capped at your guarantee limit. Use it to understand the real worst case before you sign, and to argue for a limited guarantee with the smallest possible cap. Going guarantor is a legal commitment, and lenders require you to take independent legal advice, which you absolutely should. This is a simplified estimate, not legal or financial advice.

A worst-case estimate ignoring sale costs and arrears interest, which would increase the shortfall. Always take independent legal advice before going guarantor. Not advice.