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Parent Guarantor Mortgage

Shane Reavey explains how a Parent Guarantor Mortgage works.

Can parents be guarantors for a mortgage? Can you use your parents as a guarantor?

Yes – and they’re the most common guarantors in the UK. Lenders prefer parent guarantors because they tend to have a strong financial link to the applicant.

Is it easier to get a guarantor mortgage with your parents?

It can be, because parents typically have stable incomes, equity in their property, and good credit scores, built up over many years. Their affordability can be the difference between someone getting the house they want or not.

Is there an age limit when parents are mortgage guarantors?

There can be, depending on the lender. Many stay in line with normal lending criteria and lend up to age 70 or 75.
However, some lenders specialise more in guarantor mortgages, or, what’s more common in the market now, is the Joint Borrower Sole Proprietor scheme. We have a separate podcast on those if you want to listen to it.
Those lenders can typically go to age 80 or 85, depending on the income. They’d want a parent to share evidence of their future income beyond retirement age, such as pension projections. That will be factored into the overall lending decision.

What are the risks to parents of being a guarantor on a mortgage?

A guarantor is effectively taking the mortgage out themselves, along with their child. They become legally liable for that mortgage; if it’s not paid, it doesn’t just impact the person taking ownership of the property. The guarantor can also be impacted.
It can cause damage to your credit score, especially with mortgage defaults on your record.
Those are the standard risks of any credit application, and being a guarantor doesn’t mitigate any of those risks. You’re legally liable for that mortgage.
Because of that, all parents will be asked to take independent legal advice as part of the mortgage process, to make them fully aware of the risks involved.

Do both parent and child need good credit for a guarantor mortgage?

Ideally, yes. Having a good credit profile makes everything a lot easier on lending decisions.
However, people do have blips, and lenders recognise that. We’ve had a pandemic and a cost of living crisis, which caused people to fall behind. A lot of lenders offer a common-sense approach to lending on that basis.
If there’s a rational reason behind that blip, and especially if you have a good deposit, lenders are happy to take a little bit of a risk. If your deposit is small, they might be more uneasy, but it depends on the situation.

Speak To an Expert

Come on in and be quite forward with what you’re after – just be very honest with your mortgage broker. It’s good to make sure that we know absolutely everything about you. That way we can’t be blindsided by a lender. An open book policy is very good when coming to see your mortgage broker. 

Can a parent and child get a guarantor mortgage with a gifted deposit? Do you need a deposit for a guarantor mortgage?

Typically, you would need some form of deposit, but a gifted deposit is acceptable. All lenders have their own criteria on what they accept as a gifted deposit and the source of those funds.
It’s quite common with a guarantor mortgage for the parent to also be providing part of the deposit. Sometimes other family members add to the deposit to help get that mortgage for the applicant.
Some lenders stipulate that the guarantor isn’t able to live in the property at all, while others are happy for them to live there. In short, yes, you can use a gifted deposit with a guarantor or a Joint Borrower Sole Proprietor mortgage

What power does a parent guarantor have?

A guarantor has responsibility, but not control. If you’re a guarantor, the property still belongs to the applicant. You don’t have any share in the property or get to make decisions about it. The role you play is purely financial, to guarantee repayments and accept liability if that goes wrong in any way.

If a parent is a guarantor on a mortgage, how long are they liable?

They’re liable as long as they’re on that mortgage. Generally, when someone takes a guarantor mortgage, we will give them advice based on that guarantor, but we’ll also look at longer-term planning.
We’d calculate how much of the mortgage will be left in five years time, and what your income is likely to be at that point. Eventually, the applicant will be able to afford the mortgage on their own and can remortgage to a standard product. The guarantor then comes off and has no liability from that point on.

Do parents need to already own their own property to be a guarantor?

Often, yes, as it shows the lender they have a stable background. It’s all about what picture we present to the lender, and a property owner is seen as having security.
With some lenders stipulating that a guarantor can’t live in the property, it’s helpful to evidence that they own their own home. But it is possible for a parent who isn’t a homeowner to guarantee a mortgage. Lenders will look more closely at affordability and their situation – are they renting? What is the rental payment? That would all be factored in.

How can a mortgage broker help? Is there anything else we need to know?

With guarantor mortgages, Joint Borrower Sole Proprietor or family-assisted mortgages, there’s a lot to take in. We’ve got the expertise in this area, and we know which lenders to go to.
Plus, we include all parties in the conversations from the outset. That way, the main applicant knows what they’re taking on and what the guarantor is there to do, and the guarantor understands the risks too.
We’re a friendly face to answer all the questions that will no doubt pop up. It’s a more quirky way of doing a mortgage, so we lend our expertise to make it as smooth a process as possible for you.

Key Takeaways:

  • Parents are the most common guarantors in the UK, and their stable income, property equity, and good credit scores can significantly increase the applicant’s affordability, making it easier to secure a mortgage.
  • A parent guarantor becomes legally liable for the entire mortgage. If payments are missed, it can damage the guarantor’s credit score, which is why all parents are required to take independent legal advice.
  • While standard lending may stop around age 70 or 75, some lenders or the Joint Borrower Sole Proprietor scheme can extend lending up to age 80 or 85, often requiring the parent to provide evidence of future income, such as pension projections.
  • A guarantor takes on responsibility (financial liability) but has no control over the property, which belongs entirely to the applicant, nor do they have any share in the property.
  • The parent is liable only as long as they are on the mortgage. The general strategy is for the applicant to remortgage to a standard product and remove the guarantor once the applicant can afford the payments independently.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

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