Consumers are being warned to avoid risky home loans that could see them or their families left homeless.

Consumer group CHOICE says risky lending practices that became extinct during the global financial crisis are re-emerging in the mortgage market.

That includes 40-year mortgages, family guarantees and no deposit and low deposit home loans, which are currently used by a third of all new borrowers.

CHOICE spokesman Tom Godfrey said these loans left little margin for changes in circumstances, like an interest rate hike or drop in income.

Family guarantees, which allow a borrower to use a family member's home as collateral, could see both the borrower and their relative lose their homes if repayments aren't met.