What is a guarantor mortgage?

For many first-time buyers, the challenge of getting a mortgage comes down to meeting specific lending criteria. You might be close on your deposit, have a steady income that covers your outgoings, or simply not have much credit history yet. A guarantor mortgage is one option designed to help in these situations, by adding extra security for the lender. 

It works by bringing another party, typically a family member, into the application to add financial weight behind it. This can make the difference between a lender approving a loan or turning it down. 

That support comes with real legal obligations, though, for the guarantor as much as for you. This guide explains how the process works, what the risks look like on both sides, and what to consider before going ahead. 

What is a guarantor mortgage? 

A guarantor mortgage is a home loan backed by a third party, which is usually a parent or close relative. They agree to be legally responsible if you can’t keep up with repayments, but they don’t co-own the property, and their name won’t appear on the deeds. Their role is to give the lender confidence that the loan will be repaid one way or another. 

How does a guarantor mortgage work? 

When you apply, the lender looks at both your financial situation and your guarantor’s. Your guarantor then agrees to a specific legal arrangement, either securing the mortgage against their own property or ringfencing a sum of savings, depending on the structure of the deal. 

If your repayments are made on time every month, the guarantor stays in the background, and the arrangement never needs to be called upon. If you fall behind and can’t cover what’s owed, the lender turns to them instead. 

The scope of that liability varies between lenders. Some cap the guarantor’s responsibility at a portion of the loan, others extend it to the full amount.  

What documents do I need to apply for a guarantor mortgage? 

Both you and your guarantor will need to pull together paperwork before an application can go anywhere.  

For the borrower, lenders typically ask for: 

• Proof of identity, such as a passport or driving licence 

• Proof of address, such as a recent utility bill or bank statement 

• Payslips or proof of income covering the last three months 

• Bank statements, usually for the last three to six months 

• Details of any existing debts or regular financial commitments 

Your guarantor will need much of the same, plus evidence of whatever asset they’re putting forward, whether that’s their property, savings, or both. 

When would someone need a guarantor? 

There are several situations where someone might seek a guarantor. Some examples include: 

• A buyer might have a deposit, but not quite enough to meet the lender’s minimum for the property they want 

• A buyer’s income covers the repayments they’d be eligible for comfortably, but not on the terms the lender requires 

• The buyer has a limited credit history, so there isn’t evidence of successfully keeping up with loan repayments in the past. This is often the case for younger buyers who haven’t had enough time to build one 

In most cases, a guarantor doesn’t alter what the buyer can afford to repay each month. The lender’s appetite for the risk is what changes. 

Who can get a guarantor mortgage? 

First-time buyers are the main audience for this type of mortgage, though some lenders will consider home movers too.  

Criteria vary quite a bit, so what one lender will accept, another may not. Speaking to a mortgage broker that covers the whole of the market is often the most efficient route to understanding what’s available without spending weeks researching it yourself. 

One thing that stays constant regardless of lender: you’ll still need to demonstrate that you can afford the repayments. A guarantor will support the application, but you need to remain responsible for the mortgage.  

Not all high street lenders offer guarantor mortgages, so it’s worth using a whole-of-market broker to search across those that do.  

Who can be a guarantor for a mortgage? 

Parents are the most commonly accepted guarantors, and some lenders also accept siblings or other close relatives.  

Beyond the relationship requirement, guarantors are typically expected to be UK residents, within an age bracket the lender is comfortable with, and to either own their home or hold substantial savings. Some lenders specify that any property used as security must be owned outright. 

What are the requirements to be a guarantor? 

Lenders assess guarantors on their own merits, and some of the typical requirements include: 

• Being a close family member of the person applying for the mortgage 

• Owning their home outright or holding significant equity in it, or having sufficient savings set aside  

• A clean credit history with no significant missed payments or outstanding debts 

• Passing the lender’s affordability checks independently 

• Taking independent legal advice before signing, which some lenders treat as a firm requirement rather than a recommendation 

Age is also a factor. Some lenders apply upper age limits tied to when the mortgage term ends, so it’s worth establishing this early if your guarantor is approaching retirement age. 

Will my guarantor need a credit check? 

Yes. Their credit history will be assessed just as thoroughly as yours, so any missed payments, outstanding debts or existing financial commitments could influence the outcome. It’s worth them pulling their own credit report before you apply so nothing comes as a surprise. Read more about credit scores here.  

How much can you borrow with a guarantor mortgage? 

Your borrowing is still calculated on your income and what the lender considers affordable for you – a guarantor doesn’t change that calculation. What changes is the lender’s willingness to approve the application in the first place. You can use our mortgage calculator as a starting point. 

What are the risks of a guarantor mortgage? 

There are some risks and things to be aware of if you’re thinking about taking out a guarantor mortgage. These include: 

• If you miss repayments and can’t make up the shortfall, the lender can pursue your guarantor instead. That might mean drawing on their savings or, in serious cases, taking action against their home. 
• The guarantor’s own ability to get credit in the future can also take a hit, as the guaranteed mortgage may show up in future affordability checks. 
• There’s also the question of what it does to the relationship. Tying a family member into a legal obligation alongside you is a significant ask, and if things become strained financially, that pressure could have an impact beyond the money involved.  

Both parties should consider taking independent advice beforehand. Some lenders may even require it. 

Are there different types of guarantor mortgages? 

There are two main structures. With a property-backed arrangement, the guarantor uses equity in their own home as security. The lender gets comfort from that asset, and the guarantor accepts that it could be at risk if repayments aren’t maintained. 

With a savings-backed arrangement, the guarantor places a lump sum into a linked savings account as security for a set period. If all repayments are made as agreed, the guarantor usually gets it back when that period ends. If things go wrong, the lender can draw on it instead. 

Not every lender offers both, and terms vary.    

Is my guarantor liable for the whole mortgage? 

This will depend on the lender. Some limit liability to the portion of the loan the borrower couldn’t access alone. Others apply it to the full amount. Your guarantor needs to know exactly which they’re agreeing to before they sign. 

What if I can’t make mortgage repayments? 

Contact your lender, the earlier the better. Most have options for people in genuine difficulty, such as a payment break or a temporary reduction. But they need to hear from you first, and the longer you leave it, the fewer options tend to be on the table. 

Do I have any other options as a first-time buyer? 

A few buying schemes worth knowing about: 

• Shared ownership: Buy a percentage share of a property and pay rent on the rest, reducing the deposit and loan size you need. 

• First Homes scheme: Discounted new builds for eligible first-time buyers in England. 

• Mortgage Guarantee Scheme: Government scheme encouraging lenders to offer 95% loan-to-value mortgages. 

A mortgage broker will be able to tell you which of these you might qualify for.  

If you’re looking to buy your first home and are still exploring options, you can get an idea of how much you might be able to borrow using our mortgage calculator.

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FAQs

• Who can be a guarantor for a mortgage?

  Usually, a parent or close relative who passes the lender’s affordability and credit checks, and who owns their home or has substantial savings.  

• What risks does a guarantor take on?

  If repayments are missed, the guarantor may have to cover them. Their savings or property could be at risk, and acting as guarantor can affect their own ability to borrow while the arrangement is active. 

• What does a gifted deposit letter need to include?

  A confirmation the money is a gift and not a loan, the amount, and that the giver has no claim on the property. Check with your lender as they often have their own required format. 

• Can family support affect future borrowing or retirement plans?

  Yes. Guaranteeing a mortgage or gifting a large sum can affect what a person can borrow in future. Independent financial advice is recommended before committing. 

• How long does a guarantor stay on a guarantor mortgage?

  Until the lender agrees to release them – this is usually once the borrower has sufficient equity or moves onto a standard mortgage. There is no automatic end date. 

• Can a guarantor mortgage affect the guarantor's own borrowing?

  Yes. The guaranteed mortgage may be factored into affordability checks by other lenders, limiting their ability to borrow or remortgage while the arrangement is in place. 

• Can I use both a guarantor and a gifted deposit?

  Some lenders allow it, but expect additional checks and documentation on both sides. Whether it’s possible comes down to the specific lender’s criteria. 

Please note: Your home may be repossessed if you do not keep up repayments on the mortgage. Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.