A guarantor mortgage is a home loan where a family member or close relative agrees to cover the repayments if the borrower cannot pay. The guarantor does not usually own a share of the property, but they take on legal responsibility for the debt, often secured against their own home or savings.

These arrangements can help first-time buyers or people with a smaller deposit or limited credit history borrow more than they might on their own. The guarantor must understand the commitment fully, as their finances and property could be at risk if payments are missed. Many lenders now offer joint borrower sole proprietor and family deposit options as alternatives, so it helps to compare the routes with an adviser.

Who can be a guarantor for a mortgage?

A guarantor is usually a parent, grandparent or other close relative. Lenders assess the guarantor as well as the borrower, so they normally check the guarantor’s income, credit history and age, and many require the guarantor to own a property with enough equity or to hold savings. Most lenders also ask the guarantor to take independent legal advice before the mortgage completes.

Types of guarantor mortgage

  • Income guarantee: the guarantor’s income is used to support affordability where the borrower’s own income falls short.
  • Property security: the lender takes a charge over part of the guarantor’s home as extra security.
  • Savings security: the guarantor places savings in a linked account, which is held for a set period or until the loan falls below an agreed level.

Who offers guarantor mortgages?

A smaller group of UK lenders offers guarantor mortgages, mainly some building societies and specialist lenders, and many of these products are only available through mortgage brokers. Criteria differ between lenders, including who can act as guarantor and the maximum guarantor age at the end of the term, so an independent, FCA-regulated broker can check which options fit before you apply.

Related guides: guarantor mortgages in the UK, how guarantor mortgages work and joint borrower sole proprietor mortgages. Reviewed by Damian Youell CeMAP.