What is a guarantor mortgage?
A guarantor mortgage is a home loan where someone else, usually a parent, grandparent or other close relative, agrees to cover the payments if you cannot. That promise gives the lender extra security. Because its risk drops, it can offer you a mortgage you might not have qualified for on your own.
The guarantor’s name does not usually go on the property deeds, so they hold no share in the home. That sets it apart from a joint mortgage, where everyone named owns part of the property. A guarantor’s role is financial only. They stand behind the promise that the loan gets repaid, while you remain the sole owner and the person responsible for the monthly payments.
Lenders set these up in different ways. One might ask the guarantor to put up their own property as security. Another might ask them to lodge savings with the lender, and some simply add the guarantor’s income to the affordability sums. Our borrowing calculator gives you a first estimate of how much you could borrow with a guarantor behind you.
Types of guarantor mortgage
Income-based guarantor mortgages count the guarantor’s income alongside yours when the lender runs its affordability check, the test of whether you can afford the repayments. Combined, the two incomes can support a larger loan than yours alone. The lender looks at the guarantor’s earnings and their existing outgoings in the same detail it looks at yours.
Savings-based guarantor mortgages, sometimes called family springboard mortgages, ask the guarantor to put a sum, usually 10% of the property value, into a savings account with the lender. The lender holds it for a set spell, normally three to five years, then hands it back with interest once you have kept the payments up.
Property-based guarantor mortgages lean on the guarantor’s own home as extra security. The lender registers a charge (a legal claim) over that home. If you were to default and selling your property did not clear the debt, the lender could then look to the guarantor’s property to recover what is left.
Who can be a guarantor?
Most lenders want the guarantor to be a close relative, typically a parent or grandparent. A few will accept a sibling or another family member. Friends or people unrelated to you are rarely allowed.
A guarantor needs a solid credit history, enough income or assets to back the promise, and usually has to own a home in the UK. Age matters too. Many lenders want the guarantor to be under 70 to 75 by the time the term ends. They also go through their own credit and affordability checks as part of the application, just as you do.
What happens if the borrower misses payments?
If you miss payments, the lender turns to the guarantor to make up the shortfall, and they are legally bound to pay it. Should neither of you be able to cover it, the lender can move to repossess your property. Where the guarantee is secured on the guarantor’s home, that home can be at risk too.
This is a serious commitment for everyone involved. Both of you should be clear on what it means before you sign, and the guarantor should take independent legal advice of their own.
How Clearview can help with guarantor mortgages
Guarantor mortgages sit in a specialist corner of the market, and not every lender offers one. At Clearview Mortgage Solutions we know which lenders have the strongest guarantor products, and we match you to the one that fits your situation.
We walk both the borrower and the guarantor through each step, set out plainly what the guarantor is agreeing to, and check that everyone is happy before anything is signed. Get in touch for a free, no-obligation chat.