Guarantor mortgages

What is a guarantor mortgage?

A guarantor mortgage is a type of mortgage where a third party (most commonly a parent or close family member) agrees to take responsibility for the mortgage repayments if the borrower cannot.

In practice, this usually means:

The borrower applies for a mortgage in the usual way, based on their income and affordability.
The guarantor signs a legal agreement to cover the mortgage payments if the borrower falls into difficulty.
The guarantor’s property and/or savings are often used as security, so the guarantor is exposed to real financial risk.

For many first-time buyers, guarantor mortgages can be a route into home ownership when they can’t qualify on their own—often due to a smaller deposit, limited income, or credit history.

How does a guarantor mortgage work?

The exact structure varies by lender, but the core idea is consistent: the guarantor provides additional security and repayment support.

Borrower and guarantor responsibilities

The borrower remains responsible for making the mortgage repayments.
The guarantor becomes liable under the guarantor agreement if repayments are not met.

Because the guarantor may have their home or savings tied up, guarantor mortgages are not just “extra help”—they are a long-term commitment.

Different names for similar arrangements

You may see guarantor-style mortgages described using different terms. Some lenders use alternative product names or structures that reflect how the guarantor is involved.

One related concept you may come across is joint borrower, sole proprietor (JBSP), where two people apply but only one person is on the deeds. In those situations, the borrower who will live in the property may still be treated as a first-time buyer for certain purposes, depending on the specific arrangement.

Costs and considerations for guarantors

Guarantor mortgages can involve additional costs and knock-on effects, particularly for the guarantor.

Stamp Duty Land Tax (SDLT) implications

If the guarantor’s name is added to the deeds, it can affect stamp duty position and overall tax cost. The impact depends on the guarantor’s circumstances and the property being purchased.

Security tied up in property or savings

Many guarantor arrangements require the guarantor to provide security, such as:

a charge over property (for example, the guarantor’s home)
savings held in a lender-controlled account for an agreed period

This can reduce flexibility for the guarantor, including limited access to savings during the term agreed with the lender.

What happens if payments are missed?

If the borrower misses payments, lenders typically follow their own process, but outcomes can include:

requesting the guarantor to make payments
applying fees for missed payments
using the guarantor’s security (for example, savings held in deposit accounts)
extending the period that savings are locked away

In more serious cases, lenders may take further action to recover the debt, which can include repossession. The key point is that the guarantor’s risk is not theoretical.

Who are guarantor mortgages for?

Guarantor mortgages are usually considered when a borrower cannot meet a lender’s normal criteria on their own.

Common reasons include:

deposit size is limited
income is not high enough to support the desired borrowing amount
credit history is less established or less favourable

They can also be relevant where a borrower is trying to buy sooner rather than waiting to build a larger deposit.

Typical restrictions and lender rules

Guarantor mortgages are not available in every situation. Lenders often apply restrictions around:

where the borrower lives (some products are limited by nation/region)
age of borrower and guarantor
deposit and loan-to-value (LTV) limits
income and affordability for both borrower and guarantor
whether the property is the borrower’s main residence (many guarantor products are not intended for buy-to-let or second homes)
whether the borrower is a first-time buyer (some lenders have specific rules)

Because these rules vary, the same borrower could be offered different options depending on the lender and the guarantor’s circumstances.

How much can you borrow with a guarantor mortgage?

A guarantor mortgage may help in two main ways:

Deposit support: it can reduce the deposit required for a given borrowing amount, depending on how much of the loan the guarantor is covering.
Affordability support: where the guarantor’s circumstances are considered, lenders may be able to lend more than they would if the borrower applied alone.

The maximum borrowing available still depends on affordability assessments and the lender’s product limits.

Repaying a guarantor mortgage

A guarantor mortgage is repaid over the same general timeframe as a standard mortgage (often up to around 25 years, depending on the lender and applicant profile).

If all payments are made on time, the mortgage continues as normal and the guarantor should not need to make repayments.

However, if the borrower’s circumstances change, the guarantor agreement may mean the guarantor is asked to step in.

How long does a guarantor stay on the mortgage?

Being a guarantor is typically not a short-term arrangement. Many agreements continue until one of the following happens:

the mortgage is repaid
the loan-to-value (LTV) falls below an agreed threshold
the borrower can demonstrate they can afford the mortgage without the guarantor

Whether a guarantor can be released (and how easy that is) depends on the lender’s rules and the structure of the guarantor arrangement.

Key questions for borrowers and guarantors

Before proceeding, it’s worth working through the practical implications for both parties.

For borrowers

How will the lender assess affordability, and what happens if income changes?
What level of the mortgage is the guarantor effectively covering?
Are there any restrictions on the property type or how the property can be used?
What is the expected path to removing the guarantor?

For guarantors

What security is being provided (property charge and/or savings lock-up)?
How long will the security be in place?
What are the lender’s steps if payments are missed?
Could the arrangement affect the guarantor’s ability to borrow in the future?

Frequently asked questions

Is a guarantor mortgage suitable for first-time buyers?

It can be. Guarantor mortgages are often used by first-time buyers who struggle to meet a lender’s normal deposit or affordability requirements on their own.

Does the guarantor own part of the property?

Not necessarily. In many guarantor arrangements, the guarantor does not automatically own a share of the property, but they may still provide security and become liable under the guarantor agreement.

Do you always need a deposit with a guarantor mortgage?

Not always. Some structures can reduce the deposit requirement, depending on how much of the loan the guarantor is covering and the lender’s product rules.

Can a guarantor be released from the mortgage?

Often, but not always automatically. Release is usually subject to meeting the lender’s conditions, such as reaching an agreed LTV level or proving the borrower can afford the mortgage without support.

What happens if the borrower misses payments?

Lenders may contact the guarantor and apply their agreed process, which can include fees and the use of security. The exact approach varies by lender and the terms of the guarantor agreement.

Related guides

First-time buyer mortgages
Joint borrower, sole proprietor (JBSP) mortgages
How parents can help you secure a mortgage