Parental help and guarantor mortgages

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Guarantor mortgages for first time buyers

Many parents and grandparents want to give their child a helping hand to get onto the property ladder and are in a position to do so. With family members willing to take on some of the risk of lending to a first-time buyer, some mortgage lenders are prepared to lend more and at a better interest rate.

With an increasing number of guarantor mortgages available on the market, Key Solutions can work with you to find the most suitable product for you and your family. And as a whole-of-market broker, we can compare guarantor mortgage rates from nearly every lender on the market, giving you the best chance possible to be approved.

What is a guarantor mortgage?

A guarantor mortgage, sometimes known as a parental helper mortgage or family-assisted mortgage, is when a family member or close friend agrees to take on the responsibility of repaying the mortgage, if the person who holds the mortgage is unable to make repayments. This arrangement is often used to help people like first-time buyers or those with limited credit history secure a mortgage they might not otherwise qualify for on their own. 

The guarantor provides an additional layer of security for the lender, increasing the likelihood of a mortgage approval or allowing the borrower to access more favourable terms, like a higher loan amount or lower interest rates. 

How does a guarantor mortgage work?

Much like a standard guarantor commitment, a family member signs up to guarantee that any debt is paid in full. Quite simply, if you miss a mortgage payment then your parent or grandparent, as the guarantor, has to pay it on your behalf.

Typically, your family member would offer their own home as collateral on your mortgage and to be able to do this they will need to have a reasonable amount of equity in their property – 25% is a standard minimum requirement. The lender will then take a charge on their property as security to back the guarantee. Some schemes may allow family members to use other forms of security, such as the balance of a savings account.

Your guarantor can be removed from the mortgage at a later date, usually once the loan-to-value ratio has reached an agreed level and it has been established that you are comfortable covering the full cost of the repayment yourself.

Who can guarantee a mortgage?

Generally, guarantors for mortgages are individuals with a stable financial standing who are willing to take on the responsibility of repaying the loan if the primary borrower is unable to do so. Anyone can serve as a mortgage guarantor, whether it’s a parent, grandparent, another family member, or even a close friend. Guarantors can be in work, self-employed, or retired, however, they must maintain a stable financial situation.

Prior to approval, lenders conduct a thorough assessment of potential guarantors, typically considering the following criteria:

  • They should be at least 21 years old.
  • They should either own their property outright or own a significant amount of equity in their property.
  • They may be required to demonstrate an income level that is high enough to help cover mortgage repayments if needed.
  • A good credit score.


Most lenders will also have maximum age requirements for guarantors, as mortgages usually last about 25 years. This means it might be harder to get a guarantor mortgage if the guarantor is over 75 years old. It may also mean that the available term is much shorter as the lender will usually not allow any applicant to be older than 70-75 at any point during the mortgage term – including the guarantor. So if your guarantor is already 65 you may only be offered a five to ten year mortgage term.

What are the types of guarantor mortgages?

Guarantor mortgages come in various forms, each catering to different financial situations and borrower needs. Here are some specific types you may wish to speak to us about:

Limited Guarantee Mortgage

This type involves a guarantor agreeing to cover a specific portion of the mortgage, typically a percentage. The guarantor's responsibility is limited to the agreed-upon amount, offering a level of financial protection for the guarantor.

Joint Borrower Sole Proprietor Mortgage

In this arrangement, the guarantor becomes a joint borrower on the mortgage but does not have a stake in property ownership. This structure helps the borrower qualify for a higher loan amount while maintaining sole ownership of the property.

Guarantor Lifetime Mortgage

This type is more common in the context of equity release. The guarantor commits to repaying the mortgage or releasing equity from their property in the event of the borrower's inability to meet obligations, often utilised by older individuals to assist younger family members.

How does a family offset mortgage work?

Another option for young buyers and their families is a family offset mortgage. It works by your parents or family members putting their savings into an account linked to your mortgage which effectively serves as a deposit on the property you want to buy.

This option also lowers interest charges as the savings balance is deducted from the value of the loan. Whilst it is locked up for an extended period of time, the benefit to your parents or other family members is that they don’t have to physically pay their savings to the mortgage company.

Why choose Key Solutions for remortgaging deals?

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If we say you qualify for a mortgage then we will stand by that decision and provide a 100% mortgage guarantee to you that you can get the funding you require. If we don’t we will refund any associated cost you have incurred.

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Our advice to you is backed by our unique unconditional service guarantee which means if you are not happy with the service that we provide just tell us why and we will immediately refund any fees that you have paid us.

Every mortgage in the market

As a trusted whole of market broker we have access to every mortgage product on the market as well as access to exclusive rates you won't get by going direct to a bank.

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We will complete all research, administration and chasing on your behalf so you don’t have to worry about a thing! So leave it with us and your new mortgage offer will be with you quicker than you know it!

Making it easier to get help as a first-time buyer

Whether you are a parent looking to help your child purchase their first home, give our friendly team of experts a call us on 0800 138 5856 or get in touch below to discuss obtaining a parent guarantor mortgage for your child.

If you’re a first time buyer looking to obtain a mortgage, check out or mortgage calculator below:

Find out how much you can borrow with our free mortgage calculator.

Our calculator is designed to make things easier for you, giving you a quick guide on how much you can borrow for any residential mortgage.

We take live information from nearly every mortgage lender in the market to give you an idea of your personal mortgage affordability, based on your income and outgoings.

All you need to do is fill in your information and your mortgage affordability will be displayed to you in a matter of minutes.

FAQs About Guarantor Mortgages

Typically, a guarantor is a close family member, such as a parent or a grandparent. Lenders may also consider siblings or legal guardians as potential guarantors. The main requirement is that the guarantor has a stable financial standing and is willing to take on the responsibility if the borrower fails to meet their mortgage obligations.

The process of securing a mortgage with a guarantor involves several steps. Firstly, the borrower and the guarantor must find a lender that offers guarantor mortgages. The guarantor must undergo a thorough financial assessment to ensure they meet the criteria. Then, the borrower and guarantor will submit the necessary documentation, and once approved, the mortgage can proceed as usual. The guarantor will usually be required to seek independent legal advice by the lender and this may result in some additional costs.

The amount you can borrow with a guarantor mortgage depends on various factors, including your income, credit history, and the lender’s policies. Having a guarantor can potentially increase the amount you’re eligible to borrow, as it provides additional security for the lender. If they’re willing and able, your guarantor may even be able to make additional monthly payments which can further increase the total amount you can borrow. It’s essential to discuss your specific financial situation and borrowing capacity with your mortgage adviser or chosen lender.

Having a guarantor for a mortgage may increase your chances of loan approval, allowing you to borrow a larger amount, and potentially secure more favourable interest rates. Additionally, a guarantor mortgage can be a viable option for first-time buyers or those with limited credit history.

A guarantor takes on the responsibility of repaying the mortgage if the primary borrower defaults on their payments. It’s crucial for guarantors to understand the financial commitment involved and the potential impact on their credit score if the borrower fails to meet their obligations.

In some cases, it may be possible to remove a guarantor from a mortgage. This usually involves refinancing the loan or meeting specific criteria set by the lender, such as demonstrating a stable financial situation and an improved credit history. It’s advisable to discuss the possibility of removing a guarantor with your lender and seek professional advice if needed.

Yes, there are risks associated with guarantor mortgages. If the borrower defaults on payments, the guarantor is legally obligated to cover the repayments. This could impact the guarantor’s credit score and financial well-being. It’s crucial for both parties to thoroughly understand the terms and potential risks before entering into a guarantor mortgage agreement.

While most guarantors are typically close family members, some lenders may accept non-relatives as guarantors. However, the non-relative will still need to meet the financial criteria set by the lender and be willing to take on the responsibility of guaranteeing the mortgage.

If the mortgage holder is unable to make their mortgage payments, the guarantor becomes legally responsible for covering the repayments. The specific actions a guarantor has to take can vary based on the terms outlined in the guarantor agreement. Typically, the guarantor may need to step in and make the payments on behalf of the borrower. In extreme cases where the borrower continues to default, the guarantor may face legal consequences and potential impact on their credit score.