Guarantor Mortgages are taken out by a mortgage applicant who uses a guarantor (usually parents, relatives or close family friends) to guarantee the mortgage repayments. To be accepted, the lender will look at the financial background and credit rating of the guarantor who must be able to prove they have enough disposable income, after paying their own outgoings (including their own residential mortgage) in order to afford the monthly repayments in the event of a default by the main applicant.


The lender will also look at the duration of time in which the guarantor’s income can be sustained. If a guarantor is near or close to retirement, they must be able to demonstrate that their pension income is sufficient when they retire in order for the mortgage guarantee to continue and for the mortgage to be accepted.

Guarantor Mortgages


There are 2 types of guarantor mortgages which are explained in more detail below:

  1. Full Liability
  2. Limited Liability

Full Liability

  • The guarantor(s) is liable for the entire debt should the borrower default on their mortgage payments.
  • The guarantor must agree to undertake full payment, on demand, if ever the borrower defaults.
  • The mortgage applicant remains fully liable for the mortgage amount borrowed

Limited Liability

  • The guarantor’s liability is limited to the borrower’s shortfall (up to a maximum of 30%) expressed as a fixed percentage of the debt, plus a further 10% of the debt should the borrower default on their mortgage payments.
  • The guarantor must agree to undertake full payment, on demand, if ever the borrower defaults, the amount of which will not exceed the guarantor’s liability
  • The mortgage applicant remains fully liable for the mortgage amount borrowed

Advantages of Guarantor Mortgages

  • Enabling a foot on the property ladder which would have otherwise not been possible
  • Obtaining a higher mortgage advance, as a result of the guarantor’s income, which may enable the purchase of a more desirable property

Disadvantages of Guarantor Mortgages

  • The guarantor may be liable for the whole mortgage balance, not just the proportion they are guaranteeing.
  • Financial or personal circumstances between each party may change over the term of the mortgage
  • It may be difficult for the guarantor to be released from the mortgage contract unless an acceptable replacement can be found or the main mortgage holder’s salary or value of the property has increased significantly.

Guarantor mortgages are usually offered on similar rates and products as mainstream residential mortgage deals.


Guarantor Responsibility

Guarantors are legally bound and jointly and separately responsible for the main applicant’s mortgage payments at any time during the mortgage term. This is a major financial commitment and should be considered very carefully by a potential guarantor before entering into the agreement.

It is recommended the guarantor seek legal advice which will incur a charge.


Your Responsibility to the Guarantor

This type of mortgage should be treated with the same degree of priority as a standard residential mortgage. You have a responsibility to your guarantor to pay the mortgage regularly and on time every month in order to honour your mortgage terms and keep your credit history in a healthy state of repair. If you fail to pay the mortgage, you will be putting your guarantor in a compromising position as they will be legally bound to pay the mortgage for you.


Children buying for Parents

Yes, it makes a change, but guarantor mortgages are also available for children who wish to purchase a property for their parents during retirement.

Two of the most popular reasons for obtaining this type of mortgage are:

  • 1. Enjoy retirement in a more desirable location by purchasing a new property
  • 2. Enable parents to move and live closer to their family for support or to look after their grandchildren.

For further information please contact us on

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email, or complete an online enquiry form


The overall cost for comparison is 2.2% APR

The actual rate available depends upon your circumstances.

Ask for a personalised illustration. APR variable and based on a typical case

A FEE MAY BE CHARGED - AN AVERAGE FEE WOULD BE 2.7%