Guarantor Mortgages: How to Buy With Family Help

A guarantor mortgage lets someone you trust, usually a parent, agree to cover your repayments if you can't make them. In return, a lender may accept a smaller deposit, look past a thin credit history, or let you borrow more than you could on your own.

It is a genuine route onto the property ladder, but it is worth knowing upfront that guarantor mortgages have become less common. Many lenders now prefer a related option, the joint borrower sole proprietor mortgages, which does a similar job without putting the helper's home directly on the line in the same way. Both are covered on this page, so you can work out which one actually fits your situation.

If you would rather talk it through with someone who arranges these regularly, call us on 01915809890.

Do guarantor mortgages still exist?

Yes, but they are less common than they used to be. Guarantor mortgages were more popular before stamp duty rules changed. Because a guarantor's own property is used as security, they were, in effect, treated as having an interest in a second property, which triggered the higher rate of stamp duty for the guarantor.

That single change made guarantor mortgages considerably less attractive, and many lenders and families moved toward the joint borrower sole proprietor mortgage instead, because it can achieve a similar boost to affordability without that stamp duty consequence. Guarantor mortgages have not disappeared, some lenders still offer them and they can still be the right answer, but they are now one option among several rather than the default.

What is a guarantor mortgage?

If you take out a guarantor mortgage, someone else, your guarantor, legally agrees to pay back your mortgage if you can't. This gives the lender an extra layer of protection, which can make it easier for you to be accepted, and may let you borrow more or access a lower rate than you would otherwise get.

Your lender will secure the arrangement against your guarantor's home or savings, so it is a serious commitment for them, not a formality. It's worth speaking to an expert mortgage broker before you go down this route, both to check it's the right option and to understand exactly what your guarantor is agreeing to.

What is a guarantor, and who can be one?

A guarantor is someone who agrees to repay your mortgage if you default. They put up their own assets, either property equity or savings, as security. If you and your guarantor can't pay, those assets can be used to cover the shortfall.

Who can be a guarantor?

Most lenders want a guarantor to be over 21, though some accept them up to a much higher age, occasionally 85 or beyond, and to have a good credit history. Technically, this could be a parent, another family member, or a close friend, and some lenders will even accept a partner, provided your finances are kept separate. In practice, many lenders insist on a direct relative, usually a parent, so check the specific product's rules before you choose someone.

What checks are done on a guarantor?

Your lender will run a full credit check on your guarantor and confirm they're financially stable. There's no fixed minimum credit score, but the stronger their file, the more comfortable the lender will be. Before applying, your guarantor can run their own free credit check using checkmyfile (free for 30 days, then £14.99 a month, cancel any time).

They'll also go through affordability checks similar to yours, typically providing recent payslips and proof of the asset they're offering as security. If they're securing the mortgage with savings rather than property equity, that money usually has to stay in a locked account until an agreed portion of your mortgage has been repaid.

Does being a guarantor affect your own mortgage or credit?

This is the question we get asked most by people considering becoming a guarantor, and it deserves a straight answer.

Being a guarantor does not automatically appear on your credit file as a debt in the way a loan or mortgage in your own name would, and you won't own any share of the property. But it does create a real financial commitment that any lender you approach in future is entitled to ask about, and most application forms will ask directly whether you're acting as a guarantor for anyone else.

The practical effects tend to fall into three areas:

Your own borrowing: if you want a mortgage yourself while you're a guarantor, the lender will usually want to know you could still afford your own repayments even if you had to step in and cover the other mortgage too. Depending on the lender, this can reduce how much you're able to borrow.

Your credit file: if the borrower misses payments and you're called on to cover them, and you don't, that can affect your own credit record, because you're legally on the hook for the debt.

Tied-up assets: if you're securing the arrangement with savings, that money is locked away and unavailable to you, sometimes for several years.

None of this means you shouldn't do it. It means going in with your eyes open, and it's exactly the kind of thing worth talking through with a broker before you commit, both for you and for the person you're helping.

Guarantor mortgage or joint borrower sole proprietor mortgage?

These two options solve a similar problem, boosting your affordability using someone else's financial position, but they work quite differently, and which one suits you depends on your circumstances.

Broadly, a guarantor mortgage tends to suit someone whose main obstacle is a thin credit history or a small deposit, where a guarantor's security reassures the lender. A JBSP mortgage tends to suit someone whose main obstacle is affordability on paper, where combining incomes does the work instead. For a full breakdown of how JBSP works, who it suits, and which lenders offer it, see our dedicated guide to joint borrower sole proprietor mortgages.

Do you need a guarantor for a mortgage?

Not everyone does. If you've saved a solid deposit, your credit history is strong, and your income comfortably covers your likely outgoings, you probably won't need one. A guarantor tends to come into play when one of those pillars is weaker than a lender would like.

Why might you need a guarantor mortgage?

The most common reasons people use a guarantor mortgage are a low income relative to local property prices, a poor or limited credit history, or only being able to save a small deposit. Having a guarantor gives the lender more confidence that the loan will be repaid, one way or another, which can be enough to turn a decline into an acceptance.

What bad credit issues can a guarantor mortgage help with?

A guarantor is often the difference-maker when your credit history is the main obstacle. Common issues this can help with include:

• A low credit score
• Loan defaults
• County court judgements (CCJs)
• Bankruptcy
• Individual voluntary arrangements (IVAs)

If you've been told an affordable mortgage will be difficult because of any of these, a guarantor can genuinely change the outcome. If bad credit is your main obstacle, our guide to adverse credit mortgages covers your wider options too.

How much can you borrow with a guarantor?

There's no single answer, because it depends on your income, your guarantor's security, and the specific lender's criteria. What a guarantor typically does is widen your options: some lenders will stretch their normal income multiple further with a guarantor in place, and a strong guarantor arrangement can sometimes let you borrow with a smaller deposit than you'd otherwise need. You can read more about how much you can borrow relative to your salary and what mortgage you could get on your income to get a feel for the baseline before a guarantor is added into the equation.

How to get a mortgage with a guarantor

The process is similar to any other mortgage application, whether you apply online or in person, but you'll also need to provide your guarantor's personal and financial details alongside your own.

1. Choose your guarantor and have an honest conversation with them about the risks and commitment involved.
2. Gather your documents: proof of income, bank statements, and identification, for both yourself and your guarantor.
3. Have your guarantor check their own credit file before you apply, so there are no surprises.
4. Speak to a broker who arranges guarantor mortgages regularly. They'll know which lenders are currently the best fit for your situation.
5. Get an Agreement in Principle, so you know your realistic budget before you start viewing properties.
6. Submit your full application, with your guarantor's documents included alongside yours.

How can you find the best guarantor mortgage?

The most reliable way is to speak to a mortgage broker rather than approach lenders one at a time. A broker will take the time to understand your full situation and your guarantor's, and has access to a wider range of products than you'd find by going direct. Most high-street banks and building societies offer some form of guarantor mortgage, so comparing rates, fees, and terms properly is what actually finds you the best deal.

Do you need a smaller deposit if you have a guarantor?

Often, yes, though it depends on the property value, your financial situation, and your chosen lender's rules. Generally speaking, having a guarantor in place means your required deposit will be smaller than if you applied without that extra security. In some cases, a strong guarantor arrangement can reduce the deposit needed considerably.

Is my guarantor a joint owner of my property?

No. Your guarantor's name appears on the legal documents relating to your mortgage, but not on the property's title deeds. They are agreeing to make repayments if you can't, not taking any ownership share. Even if they do have to step in and cover payments for a period, that doesn't change who owns the property.

Can a guarantor be removed from the mortgage later?

Yes, but only by switching mortgages, not simply by asking your current lender to drop them. Most lenders will want to see that you've built up a certain amount of equity in the property, typically enough that a new lender is comfortable assessing you on your own income and credit history, before you remortgage without a guarantor.

At that point you'll need to prove you can afford and be trusted to make the repayments alone. If your credit position is still weak, you may find you still need a guarantor, or need to consider a remortgage onto a product designed for your circumstances instead.

At The Mortgage Genie, we have extensive experience in helping people secure the right mortgage. If you're looking for expert advice, give us a call at 01915809890, and we'll assist you on your journey to homeownership. And why not see how much you could borrow up to today by using our mortgage calculator?

The above blog has information contained within which was correct at the time of publication but is subject to change.