Paul Demarco, Independent Mortgage Adviser with ESPC Mortgages, looks at how guarantor mortgages work.

Young couple carrying box

The purpose of a guarantor mortgage is mainly to help first time buyers get on the property ladder by enhancing the borrowing power of the applicant.

How does a guarantor mortgage work?

With a guarantor mortgage, the guarantor signs up to be liable if the applicant stops paying back what was owed to the lender. Therefore, the lender has the right to pursue the guarantor for any missed payments. A guarantor mortgage basically means that you are less of a risk, because the lender has a way of getting their money back if you default on your repayments or don’t stick to your agreement with them.

Criteria for a guarantor mortgage

Not all lenders offer guarantor mortgages and those that do tend to enforce a more restrictive lending policy than would normally apply to non-guarantor loans. Students are a common type of applicant along with first time buyers and young professionals that are currently on a low income.

The lenders that do market this type of product will adopt the following criteria:

  • The guarantor must be a blood relation (for example, their parents, brother or sister)
  • The affordability is predominantly assessed on the guarantor's income
  • Any other mortgages or loans that the guarantor has will be taken into account under the affordability assessment.

Multiple borrower mortgages 

In addition to guarantor mortgages some lenders offer multiple borrower mortgages – this is very similar to the guarantor arrangement and most lenders allow four applicants on the mortgage application, and some allow students to be the main applicant.

With this arrangement, the following criteria normally applies:

  • All borrowers must sign the Mortgage Deed
  • It is mandatory that any borrower/s not named on the Title to the property obtain independent legal advice.

In summary, this can be a complex area and it is worth seeking independent mortgage advice before deciding if either of these arrangements is right for you.

ESPC Mortgages

ESPC Mortgages is a team of independent mortgage advisers who are specialists in helping first time buyers. Find out more by contacting the team on or 0131 253 2920.

ESPC magazine

This article appeared in the November 2020 issue of the ESPC magazine. Find out more about the ESPC magazine and read the latest issue online

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The information contained in this article is provided in good faith. Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain. No individual mortgage advice is given, nor intended to be given in this article.

The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.

ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.