Last reviewed: June 2026
TL;DR- A guarantor agrees to cover the mortgage payments if the borrower cannot - the guarantor's income, assets or property act as additional security for the lender.
- Guarantors are legally liable for the full mortgage debt if the borrower defaults - this is a significant long-term financial commitment.
- Guarantor mortgages are most commonly used to help first time buyers or those with limited income to meet lender criteria.
- The guarantor's credit record is affected if payments are missed, and the guarantor's own mortgage or financial position may be affected while the guarantee is in place.
How a Guarantor Mortgage Works
A guarantor mortgage involves a third party - typically a parent or close family member - who agrees to guarantee the mortgage payments if the primary borrower cannot make them. The guarantor's income may be used to supplement the borrower's income in the affordability assessment, allowing the borrower to access a larger loan than they could on their own. Alternatively, the guarantor may provide their property as additional security, which the lender can call upon if the borrower defaults.
The guarantee is a legally binding contract between the guarantor and the lender. It is not a guarantee to the borrower - it is a commitment to the lender that the guarantor will meet the borrower's obligations if they fail to do so. The guarantee typically remains in place for the life of the mortgage or until the lender agrees to release it, usually when the borrower's income or equity position has improved sufficiently to support the mortgage on a standalone basis.
Types of Guarantor Mortgage
Different lenders structure guarantor mortgages in different ways:
- Income guarantor: the guarantor's income is assessed alongside the borrower's to calculate the maximum affordable loan. If the borrower defaults, the guarantor is liable for the shortfall.
- Property guarantor (family charge): the guarantor charges their own property as additional security. The lender registers a charge against the guarantor's property. If the borrower defaults and the property is repossessed without recovering the full debt, the lender can pursue the guarantor's property. This type carries the highest risk for the guarantor.
- Savings guarantor: some lenders allow the guarantor to place savings in a blocked account as security, rather than charging property. The savings are released when the borrower has paid down sufficient equity or the guarantee is no longer needed.
The Guarantor's Legal Liability
Guarantors should understand the full extent of their legal liability before agreeing to act as guarantor. The guarantor is typically liable for the full outstanding mortgage debt - not just missed payments - in the event of default. If the property is repossessed and sold for less than the outstanding mortgage, the guarantor may be pursued for the shortfall. This can have severe financial consequences, including repossession of the guarantor's own home if it has been charged as security.
Lenders are required by FCA conduct standards to ensure that guarantors receive adequate information about the risks and that they seek independent legal advice before signing. Independent legal advice for the guarantor is typically a condition of the guarantee.
Alternatives to Traditional Guarantor Mortgages
Some lenders have developed products that provide family support without requiring the family member to be a guarantor in the traditional sense:
- Family offset mortgages: the family member's savings are linked to the borrower's mortgage and used to offset the balance, reducing interest without the family member being a party to the mortgage or guarantor.
- Joint borrower sole proprietor mortgages: the family member is a party to the mortgage (joint borrower) but not registered as an owner of the property (sole proprietor). This is used where the family member's income is needed for affordability but they do not want an ownership interest.
- Gifted deposit: the family member provides a cash gift to boost the borrower's deposit, increasing the LTV tier and potentially the maximum loan - without any ongoing liability.
Frequently Asked Questions
Can a guarantor be released from the guarantee during the mortgage term?
Yes, in most cases, but only with the lender's consent. The lender will typically require evidence that the borrower's income or equity position has improved sufficiently to support the mortgage without the guarantee. There is no automatic release - it requires a formal application to the lender, which may involve a new affordability assessment. The guarantee remains in place until the lender formally agrees to release it.
Does being a guarantor affect the guarantor's own mortgage application?
Yes. The guarantee creates a contingent liability on the guarantor's credit record. Lenders assessing the guarantor's own mortgage application will consider this contingent liability and may restrict the amount the guarantor can borrow in their own right while the guarantee is in place. The impact varies by lender.
What independent legal advice does a guarantor need?
Most lenders require the guarantor to take independent legal advice from a solicitor - separate from the solicitor acting for the borrower - to confirm they understand the nature and extent of the guarantee. The solicitor provides a certificate confirming the advice was given, which the lender requires before the mortgage can proceed. The cost of this advice is typically met by the guarantor.
Can a guarantor be based outside the UK?
Some lenders accept guarantors based outside the UK, but lender availability is more restricted. Overseas guarantors may face additional requirements around the enforceability of the guarantee in their jurisdiction and may need to seek legal advice in both the UK and their country of residence. This is a specialist area and expert advice should be sought.
