Parent Guarantor Mortgage

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

This is going back a few years, where you would use your parents’ income to support your mortgage, and lenders would look at whether they had a mortgage, loans, finance, credit cards etc., to approve it.

But the issue was that the parents ended up on the property deeds. They weren’t just on the mortgage, they were owners of the property – which meant that the buyers would pay a second tier stamp duty as a guarantor. And that’s expensive.

So instead lenders brought out a Joint Borrower Sole Proprietor mortgage. To all intents and purposes it’s the same as a guarantor mortgage, but the guarantor isn’t named on the deeds. That means there’s no second tier stamp duty.

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

From this point we’re really talking about Joint Borrower Sole Proprietor mortgages as a guarantor product.

If you’re short of borrowing the amount of money you need, it’s the only way to go – so it’s not a case of being easier. It’s the only way to get the amount that you’re looking for.

The process is still very similar. Lenders look at your income and liabilities. If there is a guarantor on that mortgage, they’re looking at their income and their liabilities too.

Is there an age limit when parents are mortgage guarantors?

This is the bit that can be prohibitive. For a Joint Borrower Sole Proprietor mortgage, most high street lenders like the guarantor to be no older than 70 when the mortgage is finished.
Therefore, if parents are already 55 or 60, it’s a very short mortgage. That can have a big effect, because a short mortgage means repayments are a lot higher.

Some lenders will go higher than 70 – a lot depends on whether the guarantor pays into a pension. These lenders may go beyond 70 or 75 and one actually does 80. So there are some ways of keeping the mortgage payments down.

It can still be an issue, because instead of the traditional 25 year mortgage, a lot of First Time buyers now look for 35 or 40 years to keep the monthly payments down. On a guarantor mortgage, you’re not able to get 35 or 40 year terms because of the parents’ ages.

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

Potentially losing the house. As a guarantor, the home is at risk if you don’t keep up with the payments. Talking about risks tends to be taken out of my hands, because there’ll be a solicitor acting for the purchase, and usually the guarantor – the parents – would have independent legal advice.

That spells out exactly what it means to be joint borrowers. If the child gets into any kind of difficulties, it does mean mum and dad stepping in to assist.

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

Yes, to both questions. You do need a deposit. I’m not aware of a lender offering 100% lending at the time we’re recording in May 2025. Some lenders do family mortgages, where they take a charge over the existing property, but that’s not what we’re talking about here. We’re talking about guaranteeing the mortgage rather than putting your own property up as security.

It could be a gifted deposit. I’ve actually got one to arrange tomorrow where the mum is a First Time Buyer and her son is gifting her a deposit. It’s a Joint Borrower Sole Proprietor mortgage where the limit isn’t the age of the guarantor, but that of the person that’s borrowing – the mum, in that particular case.

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

They’re liable for as long as they’re on the mortgage. In many cases, however, that’s a limited time. Joint Borrower Sole Proprietor is often used where the buyer is on a lower income at the moment, but they’re on a fast track to earn more money. Once they’re earning more, they can take that mortgage on their own.

If you were on £30,000 a year and you needed to be on £40,000 to get this mortgage, we’d probably get you a two-year fixed rate. In two years’ time, you have the ability to remortgage. If your income has by this point reached £40,000 you can borrow on your own.

You would do a Transfer of Equity to take the parents off the mortgage, and now you’re on your own two feet. Your parents are then not liable because they’re not on the mortgage anymore.

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

No. A lender is just looking at income and liabilities – to work out spare income, if you like. Being a property owner isn’t a prerequisite for being a guarantor.

How can a mortgage broker help here? Have you got anything else to add?

All the lenders have slightly different criteria. So, if your parents are a little older we would look for a lender that would go beyond 70, to 75 or even 80 to extend the mortgage. You wouldn’t want a very short mortgage where you couldn’t afford monthly repayments. That’s where a mortgage broker would help.

Something to consider is that it isn’t always parents – other people can as a guarantor. Some lenders require them to be blood relatives, while others won’t. Who’s acting as the guarantor will inform which lender we’re looking at.

A mortgage broker would very much tailor the mortgage to your circumstances and find the most suitable lender and product. So seek out a good mortgage broker and we’ll make your journey significantly simpler. We explain everything to the guarantors and make sure everyone knows what’s happening.

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