A guarantor mortgage allows you to borrow money to buy a home, with a parent or family member guaranteeing the loan. If you can’t make payments, your guarantor becomes responsible.
Traditional lenders want large deposits and perfect credit histories. Guarantor mortgages recognise that many young buyers have stable incomes but haven’t had time to save huge deposits or build extensive credit files.
Unlike gifted deposits (where parents give you money), guarantors pledge their property or savings as security without handing over cash upfront.
Your guarantor pledges their own property (usually mortgage-free or with substantial equity) as additional security. The lender has a legal charge against both your property and theirs.
Your guarantor places savings (typically 10-20% of your mortgage amount) in a locked savings account as security. The money stays there for 3-5 years or until you've built sufficient equity. Your guarantor earns interest during this time.
Your guarantor's income is added to yours when calculating affordability. This lets you borrow more based on combined incomes, though they're liable if you miss payments.
Your potential guarantor:
We don’t just look at whether you qualify—we assess whether being a guarantor is right for your family member. This is a significant commitment and everyone must be comfortable.
Guarantor mortgages are a privilege, not a right. Approach them with gratitude and responsibility:
This is serious. If your child/family member can’t pay:
We ensure both parties understand the risks and benefits. We’ve seen guarantor arrangements work beautifully, but only when everyone is realistic and committed.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
Before committing to a guarantor mortgage, consider:
If your parents can afford it, gifting a deposit (with no repayment expectation) might be simpler and less risky for them.
Parents go on the mortgage but not the property title. They share the debt but you own the home outright. Can be more tax-efficient.
Buying with parents on both the mortgage and title, with clear legal agreements about ownership shares.
Parents keep their savings in a linked account that offsets your mortgage interest, reducing your payments without risking their capital.
We’ll explore all options and recommend the structure that best protects everyone.
The mortgage appears on their credit file, which could affect their borrowing capacity. However, if all payments are made on time, there’s no negative impact.
Yes, most lenders allow guarantor release once you’ve reached a certain LTV (usually 75-80%) and maintained good payment history for 2-3 years.
You can sell normally. Proceeds pay off the mortgage and your guarantor is released from their obligation.
Absolutely. The guarantor provides additional security, making lenders more comfortable with self-employed income.
Yes. Guarantors must have independent legal advice before signing. This protects them and ensures they understand the commitment.
This is why clear documentation and realistic expectations matter. Legal agreements are binding regardless of personal relationships. We recommend families discuss “what if” scenarios before proceeding.
London | York | Newcastle | Sheffield
Authorised and regulated by the Financial Conduct Authority
Full member of the National Association of Commercial Finance Brokers
Not all financial products we arrange are regulated by the Financial Conduct Authority. For more information discuss with your broker or contact us.
We are a UK-based brokerage established in 1997 and are not affiliated with any other entity trading as Acorn Finance in the US or historically in the UK.