What is a guarantor mortgage?

A guarantor mortgage, sometimes known as a family-assisted mortgage, allows someone close to you to guarantee your loan. This can help you buy a home if you might otherwise struggle to get approval from a lender.

This type of mortgage means that your guarantor must agree to cover the mortgage payments if you can’t afford to make them during the mortgage term. As your guarantor is taking on responsibility for your payments, do protect them by making sure you’re in a good position to meet your repayments.

According to research from Legal & General, nearly half of homebuyers under 35 got help with their deposit from a family member in 2024. A guarantor mortgage is another way that friends or family can help to get you on the property ladder, but without actually having to give you any money.

What are my guarantor mortgage options?

If you’re a first-time home buyer or needing help to finance a house move, you’ll find there are a couple of different options when it comes to family-assisted mortgages:

Guarantor mortgage

A guarantor mortgage is designed for people who have a deposit to put down, but their income isn’t quite enough to get a mortgage on their own. That’s where the guarantor steps in – they agree to cover the repayments if the borrower can’t keep up with them. It’s a way of giving the lender that extra bit of reassurance.

Springboard mortgage

This is a type of guarantor mortgage where the guarantor agrees to put a sum of money representing a percentage of the property value into a special savings account held by the lender, instead of the borrower needing a deposit. The money still earns interest, but the guarantor can’t access their money for a set time, often five years.

Choosing the right deal depends on your long-term financial goals. Comparing guarantor mortgage products and interest rates can help you find the best deal for your situation.

Are you eligible for a guarantor mortgage?

Ready to take out a guarantor mortgage? Here’s what you need to know to make sure you’re in the best position:

  • Age: You’ll typically need to be at least 18 years old and your guarantor will typically need to be no more than 65 at the time of application, though different lenders do have different rules.

  • Equity: This depends on the lender, but 90% LTV guarantor mortgages are available. Some allow you to borrow 100% of the property's value by using your guarantor's savings in place of a deposit with a springboard mortgage.

  • Credit score: As with any type of mortgage, your credit score will play a part in determining your eligibility. The better your score, the better your chances of securing a great deal.

  • Guarantor requirements: Your guarantor will need to meet certain requirements, such as having a stable income and good credit. They’ll also need to be able to prove they can cover the payments if needed.

  • Affordability: Lenders will check both your and your guarantor’s finances to ensure the mortgage is affordable.

Make sure you compare different options to find the deal that suits both you and your guarantor.

Am I eligible to be a guarantor?

Thinking about being a mortgage guarantor for your child, grandchild or someone else close to you?

Lenders will take a careful look at you and your financial situation before giving the green light. Here’s what they typically look for:

  • Age: Lenders usually set a maximum age limit for guarantors (e.g 65). If you are going to be over 75 before the end of the mortgage term, it may be trickier. That isn’t to say it is impossible, though, so comparing lenders is essential.

  • Relationship with the borrower: You will typically need to show a close relationship with the borrower, or be a close family member.

  • Income: You’ll need to be able to prove you can afford to cover the mortgage repayments if needed.

  • Credit score: A strong credit score is beneficial, as this shows you’re financially responsible.

While guarantor mortgages can be a great way to help someone close to you get on the property ladder, it’s important to go in with your eyes open. There are a few things to keep in mind:

  • You’ll need your own legal advice: Lenders may ask for proof that you’ve taken legal advice from a solicitor before you’re officially approved. That’s because a guarantor is only able to step down from the agreement once the borrower can fully manage the mortgage on their own or if the loan is completely paid off.

  • You’re responsible for the repayments: If the borrower misses a payment or falls behind, you’ll be expected to step in and cover the shortfall.

  • Your credit score could take a hit: If things go wrong and you have to step in, it could affect your own credit history.

  • The property could be at risk: If the mortgage can’t be repaid, the lender might repossess the property, which could be a loss for everyone involved.

  • You share responsibility for the property: As the guarantor, you may also be liable for any damage to the property, so there’s more to think about than just the finances.

And remember, if anything major changes, like the borrower or guarantor losing their job, it’s very important to let the lender know straight away, as it could affect the terms of the mortgage.

It’s a generous thing to do, just make sure you’re clear on what you’re committing to.

How much can I borrow with a guarantor mortgage?

The amount you can borrow with a guarantor mortgage depends on a few factors, such as your income, the deposit you can put down, and your guarantor’s finances. Here’s a quick breakdown:

Income and affordability

Lenders usually allow you to borrow up to four and half times your annual income, though some providers may offer you a higher amount.

Deposit size

With a guarantor mortgage, your deposit could potentially be lower than a traditional mortgage. Typically, you’ll need at least 10% for a deposit, though this can vary between lenders.

Guarantor’s finances

Your guarantor’s income and credit history will also be considered. The better their financial situation, the more likely you’ll be able to borrow the amount you need.

It’s important to remember that with a guarantor mortgage, the responsibility for the loan is shared between you and your guarantor. Make sure you’ve got a clear plan for how to manage the repayments so everyone feels comfortable with the agreement.

Mortgage guides

Answering your questions about guarantor mortgages